Numerous Cracks in This Market and How to Prepare

On Thursday, the VIX, otherwise known as the “investor’s fear gauge,” spiked 40%.

VOLATILITY GAUGE

Most investors never pay attention to the volatility gauge. And that is a big mistake.

Because not only it is a warning sign of things to come, the rise in volatility also allows investors the ability to use other strategies that can be incredibly profitable during times of market duress.

The key is knowing which strategies to use and how to use them effectively.

Let’s put the recent move in the VIX volatility gauge and more importantly, the moves over the past year, into perspective.

Take a look at the 20-year chart of the VIX. Thursday’s move is just a blip, but if you look at the support over the past year, the volatility gauge has been able to maintain the 20 level for over a year…even with the market surging higher during the latter part of 2020…and that is notable.

VOLATILITY GAUGE

The 20 level for the VIX volatility gauge is notable for a variety of reasons.

The VIX typically rises when the market moves lower and declines when the market moves higher.

But we haven’t seen this historic precedent in the VIX this time around.

In fact, the VIX has held at high levels in the face of what could arguably be one of the sharpest advances in over two decades.

And the reason I am so excited is because sustained levels of volatility tend to last for five to eight years . . . so we are just in early phases of this volatility cycle. Better said, we are in the early stages of a bull market in volatility.

Readers of The Strike Price had the ability to take advantage of the bull market in volatility recently when I mentioned a potential trade in the VIX towards the middle of January only to exit it two weeks later for close to 40%.

Next week I will be sending out a similar trade to subscribers of my Options Advantage service, but the trades aren’t limited to just that service. In fact, a heightened level of volatility benefits ALL of my options selling services. Again, this is why I am so excited for what the market looks to offer us over the next several years.

In my webinar next week, I will be explaining how the rise in volatility impacts one of my other services and how I place trades using specific strategies. If you want to learn how to take advantage of the bull market in volatility, you don’t want to miss out. I hope to see all of you there!

Published by Wyatt Investment Research at