yeah Jim uh uh Jim was warning people at the top i remember the quote uh cuz his vixometer was flashing some danger and you know and you know he said it in a very gentle way he said "Can can everyone out there just be a little careful please?" You know uh cuz there was so rampant bullishness happening up there uh so if you want uh you want to keep an eye on the VIX besides seeing the number and know what it means term structure and everything uh we have the right guy here and Jim uh you're you said you're coming here you're here but you're in a secret location uh I'm wondering you've got my curiosity peaked if you told me it wouldn't be a secret location anymore right uh that's correct Dale can you hear me okay yeah I got you okay all right so uh anyway you're undercover um let me ask you this you know I'm hanging out I'm hanging out at a uh at a conference today and tomorrow it's pretty rough i had to play golf yesterday afternoon oh one of those i have to play I'm gonna have to play golf again this afternoon it sucks oh man you're gonna need a massage after 36 holds uh uh anyway I wanted to ask you when it comes to the VIX this pullback even though uh that we're getting seems different than recent VIX spikes and then give it all back in a hurry uh do you do you see that as well uh you know sometimes how a market acts after a move uh is absolutely you know so uh does that kind of speak to that there could be another wave of uh VIX to the upside and this is more like a correction the pullback we're getting in VIX here um you know I never know coach okay it's fair and none of us do but you know um I I kind of look for breadcrumbs i look for clues you know it's the old Jill Walsh looking for clues at the scene of the crime life's been good um and so yeah this most recent um move by you know the market and the VIX was definitely different than what we saw for example in August and what we saw around the Fed meeting in December um you know this this was a Yeah there you go um and and I'll pull some slides up here in a minute but you know and what was interesting about this one was you know it's it it's kind of symmetrical right from the lows when S&P topped out that third week of February you know we stairstepped higher and then we have turned around and started stairstepping lower um you know so where the prior two were really much spikier and and the band from uh the base to the next base to to a return to base was much narrower than this one um look there's so much stuff going on um both in terms of you know politics and the economy and Congress and everything else that um you know I I I subscribe to the high likelihood that you know our current administration will make volatility great again uh okay got it you know he he crushed it to super low levels in 2017 we all remember the year that VIX went to die yeah it was archaic rel the VIX was broken well and the VIX has been broken many times since then yeah yeah but uh you you know I'm just I'm thinking I because I look back at every spike here Jim and every spike got back to you know the 14 level right the 14 level 14 level even these they all got back to these low levels which were still a higher level than the historic lows here at 1163 but to me this looks like you know I don't know if we're going to grind to me it looks like it's set up in here over the next week or so to make another move to the upside that I think this this also this was more of a not panic it was orderly wasn't it orderly I referred to it I referred to it on Twitter as the orderly disruption okay all right I like you know great minds um so you know uh we're probably 786 back if you want to do a fib or anything But let's see what you have uh people have heard enough of uh my blabber so Barry what what about Fort Knox he was wondering if I was at Fort Knox oh doing Oh I see okay counting the gold there's nothing to do there anyway all right can you see my screen now got it okay so let's wind and this is a a somewhat shorter trip than some in the past you know the question you were asking you know is it safe uh and and we'll find out you know this is one of my favorites you know Dale you and I were around when the movie Marathon Man came out oh yeah and Dustin Hoffman got you know caught in a a bind with a uh a guy who wanted to perform oral surgery without anesthetics yeah yeah but anyway I you know is it safe i don't know let's talk about it uh this is you know uh taking that chart of VIX and um you know we had that August quote unquote crash which you know was by any measure historically uh the fastest rise and fall uh we've ever seen you know of a of a spike of that magnitude then you know we had what I point to the Fed meeting you know in mid December because that was again just a couple day thing um before people settled down and now we're having and you know is this a growth scare is this rotation is this I don't know what it is but um you know I I call it a growth scare because I think people are you know concerned about the MAG 7 that have been driving the index values uh people are concerned about whether inflation is coming back staying low um you know there's there's a great deal of uncertainty that all goes to whether you know the economy is going to continue to grow and support the stock market you know how about this Jim could it possibly be with dollar weakness a repatriation of assets by other countries to buy what is relatively cheap compared to the US market uh even though they're and that's the reason for their outperformance yeah you know it's it's kind of interesting um uh in addition to staring at the VIX on a day-to-day basis uh I run several um systematic strategies uh that are based on you know different look back periods and and you know relative strength and what I picked up this is going back several months now was this rotation outside of the US um and currently those models um don't have any US exposure um it's all international u so and and you know that's a big shift that's a big shift big big shift that when's the last when's the last time that happened 10 years ago 20 years ago 30 well with with any followth through for sure you know you go back to the to the as emerging markets were a great place to be but you know that has not been the case really since the global financial crisis so right and and and is this going to sustain i I have no idea you know you talk to people on the ground you've got a bunch of people that you talk to every day in Europe and parts of Asia and they're all like "Well hey you know what it sucks over here well things are not great i mean you know the bottom line is I don't care what your politics are with what Doge is doing and uh the fact that uh you know basically uh there's a lot what we're doing is more towards austerity right while Europe is more is stimulating China's stimulating we're on the opposite end of uh what it's been for the last you know since central planning uh really after the financial crisis yeah and look you know I I hate all politicians equally um I'm I'm in that party as as a you know former participant in the military-industrial complex you know I've seen that thousand wrench um you know there's no question in my mind that there are places where we could save a lot of money uh in all of the activities that the government's involved in uh are these the guys to do that uh I don't know are we going to break some eggs along the way almost certainly um you know and so I think anybody who let's just say that the economy weakens and the stock market takes a crap uh anybody who is surprised by that is just not paying attention um and and so I I'm not saying it's going to happen i don't care frankly you know it'd be a lot nicer if things went along smoothly and you know we made a few changes and people were happier and people had better jobs i you know I can well I play the cards I play the cards as I see them yeah the price action but you know you really have to be an ostrich to not see that we either are in or headed towards a constitutional crisis i've never traded a constitutional crisis have you I mean what were they trading in 1780 um I I don't know so uh I think that's uh and I know a real smart guy this guy George uh Robertson Bicker and Brad he was long the market all the time and when I asked him why he was getting out after the election he said fear of a constitutional crisis right and he just went ahead and bought Canadian dollars and he's you know kind of out of the market now so so we'll see uh let's move on with the slides so this is um you know looking at the these volatility events mapped against this thing I've created called the VIX mix um which you know for people who haven't heard about it before it's a a compilation of right now 17 component indicators of different aspects of the market and through the lens of volatility um you know so again the arrows point to last late July August uh the little Fed scare in December and then this most recent hack and what you can see is that you know particularly the the sustained moves down in the stock market were uh consistent with bearish readings and and frankly divergences u in those readings relative to the equity markets right you go back to July um equity markets had been rambling higher there was a little pullback in April that's not on this chart uh but generally you know markets were going lower left upper right and the VIX mix was saying everything's cool um there was a high in the S&P on July 16th I think it was and you know this was not confirming that new high now you know does that work every time nothing works every time um but it basically said you know keep your eyes open and and as that pullback started um and I think let me go to the next slide yeah as that pullback started on July 18th uh you know the VIX mix went bearish so two days after the high this was saying hey you know uh something's not right under the under the hood you know you better be paying attention um it it got bearish and it stayed bearish through that surprise spike you know in August first week of August oh my god what happened the unwind yeah but you are getting tells about it in war prior i don't care why you know was it the end was it the dispersion trade there was a crypto hedge fund that got a margin call over that weekend you know there going on maybe that's your next career as a financial journalist no because the reporters will always tell us after the fact exactly they they know what happened um Well and and you know this D human beings need a story you know we we we need somebody to tell us what happened and why it happened uh and I'm just telling you you know it doesn't matter anyway the next one so this was around the Fed meeting December 16th 17th so you know Fed meetings are weird right because half the time you get a little buildup of volatility a buildup of hedging and then it's a non-event and you know the the volatility just gets crushed you know gets squeezed out this was one that was a little bit different and you know I'm not saying this was one you could call but what you saw on the two days before the Fed meeting was that you know we went from uh you know essentially from a high neutral reading down to a low neutral reading it was dropping it was telling you that people were hedging this meeting and you know there are some other things that I look at that suggested you know there was kind of a low-risk longvall trade to be taken again you never know if it's going to work out but you know again uh there there were signs for those who knew where to look and in this most recent one um you know you had a S&P all-time high on the 19th of February and you know 2 days later uh this thing was down 24 points and in bearish territory and the 21st you know was before the stuff really hit the fans so again that was uh that was the tweet that uh that was a tweet that I saw where you were just asking people at least be careful that's all yeah here's a here's a little closer look at at that one and along with this bounce you know what you see back at that high was that you know you'd think all-time high for S&P you know this thing should be bullish you know it should be up in the green and it was just not up in the green it was it was you know basically at the same level it had it was at the prior high in January you know the sort of post inauguration euphoria and and so this was basically saying yeah you know okay fine you made a new all-time high but we're not convinced that it's durable um and again you know you had then two down days um and and this thing went bearish before you know you really had the full slide so you know again if you had said "If this thing goes bearish I'm going to get defensive," you know that would have paid off pretty well and then looking at this bounce going back to where you started Dale um you know the one thing this shows is that the low for the VIX mix was registered on the 10th of March okay the low for S&P was on the 13th so you know what what you can say is again does every divergence work no um but you know you were up off the lows in the VIX mix when S&P hit its low um so so it's a leading it's a leading indicator you know you could say hey well you know this VIX mix thing doesn't think it's as bad as it was a few days ago so maybe we get a bounce now how do you play that bounce i don't know it's up to you uh and and there was no guarantee there was going to be a bounce so you know you're probably waiting a day anyway and and that first you know one day rally um you know was was most of the juice so far so you know Jim if uh you know I used to trade a lot of VIX options until uh last August and I was looking watching the VIX during this whole decline which is a was a huge percentage decline in a lot of MAGA stocks and you know 20% and uh and the averages that's a pretty good hit in that period of time um I was surprised at how subdued the VIX was during that whole bearish move yeah and you know look I think I think several things number one you know again it was a I if you take a line and you go from the lower left to the upper right on your chart in a straight line there's no volatility and if you take a line that starts in the upper left and goes to the lower right in a straight line there's no volatility right but we like one of those better than we like the other one but there's zero volatility in either one and this was one of those kind of stair step down moves where you know I I I would suggest that you know what we saw was we saw RA people rather than chasing hedges they were just taking off exposure you know they were they were lightening up their Delta One positions as opposed to trying to hedge what they had you really needed the patience of Job to ride this whole decline because there were several times it looked like well we could bounce from here we could bounce from here we could bounce from here yeah there were there were def there were you know again you can see see it on the chart where you had you know several days of of reversals uh before you finally hit the bottom and there was nothing to say that that you know final reversal higher was going to stick the only thing that suggested it might you know from through through my lens was that you know we were up off the floor of you know my volatility measures okay so um you know so what about now what yeah what so what about now with this recovery we're getting um you know we've been on the greedometer at uh extreme fear for a long time so I don't think we're going to go from extreme fear to euphoria unless we are just going to have you know at maybe at 6400 we'll be there but if Go ahead i've got one more picture and then a list um okay somebody asked me a question i you know if if this market you know this this past several weeks because one of the things I said was you know market action like this is just not bullish somebody said well what do you mean by that and and what would be a sign that the market was healthier and one of the quick and easy ones from my perspective is to look at average true range and the only trick to using average true range is you really need to look at it as a percent of the price you know because as the S&P goes higher and higher the average true range as a number uh is logically just going to get bigger with price so this looks at the average true range as a percent of the S&P price and you know you can see that when it gets down below 1% that is typically coincident with a market that's going up um and the last time we had that was you know in December with that push right before the Fed meeting and you know we we really haven't gotten back there and you know we're at a pretty high level of kind of internal or day-to-day volatility um you know so this thing needs to keep coming down for me to uh consider that you know this is a healthy move and one that might be sustainable um you know we're just seeing a a continuation of significant even though the close to close volatility isn't very dramatic um you know when you take into account the gaps and the highs and the lows you know the trading ranges from day to day uh we're still at you know elevated volatility dayto day so you know well they're going to take plenty out of it today aren't they it sure looks that way so uh what you're reading from from now should uh uh with just a neutral reading on your Yeah I I'm I'm really um look I I have um I I have models that as I mentioned are positioned largely outside the US um you know on a day-to-day basis we're um you know on the on the V side we're we're taking it cautiously you know here's [Laughter] here's you know I we we had PMI this morning i didn't see what it did you know we got new home sales tomorrow durable goods jobless claims in GDP PCE the Fed's favorite you know quarterly opex on next Monday um I think some of this morning was if I I think I saw a headline that maybe the tariffs are not going to be a big deal um but that could change this week and you know who knows so um you know I think one of the challenges in this market is you either have to be a swing trader or you have to be a very considerate uh mindful very long-term investor you know who's putting money to work systematically and not paying attention to the day-to-day swings you left one thing off your list uh the solar eclipse on the uh 29th well Dale I'll I'll add it to the list just don't look at the sun i don't care i don't care because I I we need your eyes buddy because you're our watchman on the Vicks uh you're my go i promise okay so that's So that's my story if people want to find me I'm very active on X Twitter Vixologist he is and u people can still go to vixology.substack.com and subscribe for free i you know I would rather have a guy that has knowledge of volatility um handling my retirement account than someone who just thinks uh you don't have to worry about volatility because you have a portion in bonds portion in stocks portion in cash so uh think about Jim when it comes to that and I appreciate you uh you know getting away from your conference bro and uh be looking forward to your stuff turning a little bit more neutral to because I'm looking to short this rally um I think there's more left in price and time but uh I I I think there was just the intensity of the decline um just in my training says Dale sell the next rally in case it's a failing rally between 50 and 618 back so I'm going to have to execute what I've learned over the years right or wrong so I'll challenge the market to prove me wrong up there um great having you uh Jim great to be with you my friend yeah and great content follow Jim at Vixologist on X and you'll start learning about his uh indicators and uh maybe even have a chance to talk to him so that's a wrap thank you my trading warrior brother and everyone else uh people are thanking you Jim and everyone have a a a good day and uh let's celebrate uh you know a little relief in the markets and start stalking at your fib levels and that's a wrap don't just count your VIX uh derivatives count your blessings right Jim absolutely peace all right all right peace be with you too Jim everyone have a great day see you tomorrow for turnaround Tuesday join the team in 15 minutes on the morning edge adios you're welcome everyone hey traders this is Blake Marorrow with Forex Analytics thanks for stopping by our YouTube channel don't forget to like these videos share them and subscribe to our channel so you don't miss any of the content that we provide here for free thanks for stopping by i'll see you in the next video [Music]