Beyond time to get this started and VIX anomaly

OK... just because I'm about to travel and attend trading workshops for the next few weeks, might as well make the first post.

While this blog will eventually be about "seeing the trade" for now I will just begin with some market commentary and observations and maybe a few random trades. Just so you know I am not about "calling" market movement. I am about recognizing the situation and being prepared to act no matter what happens. So don't be disappointed when it seems like I am trying to have it both ways or all ways... the point is not to be right, but to be ready. As Rule #8 in the corner down there states... Trade the present. "Know the future" is not a trading rule.

So here is my first observation from over the weekend....

There is a historical anomaly in the VIX and SPX relationship. The move in late July was totally normal with the SPX breaking support while the VIX spiked out to new highs. But the action Thursday and Friday in the VIX has no precedence (at least in the data we have available). Historically only a breaking of support (and plunge) in the SPX accompanies such a move to new highs in the VIX. This time the VIX stands alone.... obviously this was caused by the crushing volume and willingness to pay large premiums in the SPX puts despite the fact the SPX had not broken support.

So what goes on here?
1. Just part of the repricing of risk going on?
2. A prelude to a crash/break of support?
3. Crushing FEAR without a basis in reality (lower prices) like never before? VIX divergence that fears are way overblown and a buying opportunity is at hand?

With no historic precedence a very interesting situation. It is kind of funny that the market has barely even fallen yet the Fed is injecting liquidity and folks are already jumping off buildings. It is early in the morning and I can see the futures are up nicely so I guess that leans us toward #3 at least for now. We may have to revisit this later in the year.

If anyone has seen this discussed anywhere please provide a link as I'd like to see.

It will take a few posts to get into the flow of the market commentary so I will not attempt to begin here except to say the market is at support.... but you knew that right? A confirming bounce buys the market some time to begin the healing process opens some short term continuation or countertrend plays. Keep in mind that failed bullish candles at support present new low risk opportunities to enter on the downside.... a concept to be discussed at a later date.

Hope you will participate and we can make some $$$ together.