VIX – Time To GIDDY UP!

The VIX (CBOE: $VIX) has seen a sharp decline since the S&P 500 bottomed in mid-June allowing large money managers to scale up on portfolio allocations that they may have been under invested in July posted very strong returns for the equity markets as a whole, and now in August which is historically a weak month, we’re seeing a bottoming wedge pattern form in the VIX. 

Thus far in the earnings season, we’ve seen mixed signals of what companies have reported and the forward guidance they’re giving. Macroeconomic data is coming in stronger than expected from the grand perspective, but pockets of weakness are starting to really show. Inflation data this week will give traders more directional opportunities, and the VIX is signaling a pattern for a potential move to the upside.