Vix Could be Hinting at a Replay of 2010
Let's take a look at the Vix with a Heikin Ashi candlestick, and on a log scale. Notice the RSI on the monthly timeframe is 43, after hitting a similar RSI high in March 2020 (80) to that of Nov 2008, when the RSI was around 80 as well. The post November crash RSI low in the Great Recession crash was around 40, and we're at 43 now on the bounce. In 2010, abruptly following the 40 RSI test, we saw the RSI rise back toward 55, taking the Vix from a low of 15.20 to a 48 handle in a matter of weeks. Here we are, after the Major crash of 2020, and Vix is back at a 16 handle, with an RSI of 43. What might happen next if we see a notable correction, is an overcorrection, which could easily take Vix back to 48 based on previous market behaviour and sentiment, post crash. I don't see Vix having more than a 1 point downside at this stage, so I may consider increasing my position yet again, in anticipation of a large spike back to the 40's as early as this month. Thoughts and ideas welcome.
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