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    October Surprise Chart Gallery

The Tension before the Panic is Thick Enough you can cut with a Knife

The chart of the short volatility futures ETF has not tracked the new highs by the major indices as is typical of the fund. What it does show is on the weekly and daily bar a high level of tension measured by TEM.  It is true that the longer a trading range persists the larger will be the breakout when it occurs. The same applies here, with short VX futures locked in a range since July and now the daily bar has registered a TE#2 calling for a trend is on the near term horizon.

NB: the S&P, FANG, and China charts contain hedge investment ideas. 

Going into the late summer early fall Ct has expected this TE#2 set up to break lower. While we know that Volalaity is direction neutral and the breaks have been to the upside in the S&P and NQ. However, what has changed is everything has hit a major peak on panic buying. The Bonds as noted topped first on an L-T TE#1 in early March, followed by Gold’s panic buying into an L-T peak August 7 and the major equity markets September 2.

Coincidentally the US dollar index made a panic selling low on the same date, September 2, 2020.

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