VIX Pre- Non-Farm Payrolls

Consensus on the street is for a December taper, I'm not including that as part of my analysis, but it may very well be very closely linked with action in multiple assets including credit, but most notably the VIX. A moth or two ago VIX (futures) strength was obvious if you looked carefully by its correlation to the SPX, it was much stronger than its correlation would suggest, that turned in to outright price strength and more importantly, huge leading positive divergences in VIX futures, as of a couple of weeks ago I called it "Stealth accumulation" because the signals were so large, yet price has not moved enough to catch anyone's attention if they weren't watching other indications like 3C or relative strength.

If this Friday's Non-Farm Payrolls (Employment Situation) come in strong, that increases the odds of a December taper, at least that's Wall St.'s perception, thus that seems to be the clear reasoning for such strength in the VIX.

I like Bollinger Bands, but if there's one asset I really like to apply them to, it's the VIX, they seem to be really effective there.

There are three signals I pay attention to with BB's, 1 is the buy/sell signal that has to do with price crossing outside the BB and then coming back in, I'm sure I'll show an example soon. The other is an Index walking the bands that shows extreme strength or weakness and the third is the squeeze which leads to a highly directional move, after seeing all the VIX based charts, it's pretty clear which way that directional move would gravitate toward, remember the market and VIX trade opposite each other.

Both the recent VIX calls and the UVXY long positions are in the green.

VIX Bollinger Band Squeeze is indicative of a highly directional breakout. The following charts all point to the direction of the breakout.

 VXX with a textbook reversal process, even a small head fake move and a huge 30 min leading positive divegrence made up of numerous shorter timeframe huge leading positive divergences.

 UVXY with perfect confirmation of the same timeframe.

 UVXY 15 min, I really like signals like this that go from confirmation of a trend to a stand-out divergence.

Here's another in the UVXY 5 min chart

This is probably some of the "Mushiness " I've been talking about today, the 3 min chart going from positive to leading positive to just about in line or what you might call a "3C consolidation".

However zoom the same chart from intraday to scale and it's leading positive.

The VIX futures 1 min shows the same kind of 3C consolidation mentioned above and thus the "mushiness" in the charts today. However we look at 3C as well as numerous indicators in mutiple timeframes, the longest being the strongest.

I have NEVER seen a 4 hour positive in VIX futures.

Until now, that's a huge leading positive divegrence in the actual VIX futures, not a derivative and it's is a very small space, this is the "stealth accumulation" I've mentioned because if you didn't see the 3C chart, you would only see what price shows and there's obviously a lot more to the VIX futures than just price.