With futures off 12 points a little while ago……VIX suddenly plunged 33%, tagging our downside target for all of 3 seconds. Futures rallied 10 quick points, but then dumped even lower.Bottom line, the bears called BS on the whole exercise. While not completely out of the woods, they’re looking to have a pretty good day — if VIX doesn’t pull any more shenanigans.
Regular members recognize this maneuver which I’ve dubbed a “shot across the bow” – a naval warfare term referencing a warning shot intended to halt one’s enemy in their tracks. Sometimes it works remarkably well.
This one is interesting in that it backtests (and, potentially dispenses with) a downside target that has been hanging out there for weeks: the long-term yellow channel bottom. We’ll find out soon enough whether this shot across the bow dispenses with VIX’s downside potential or (as it was probably intended) clears a path, as if to say “look what I can do.”
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