11/18/2025- High VIX Prep · Risk Management

11/18/2025- High VIX Prep

Following up on today's very two-sided move, it is important to be aware of just how seriously two-sided the market is.

This does unfortunately make it a little harder to plan the following day out, as there is a lot of noise; and it is very difficult to go through all of it and actually identify what is noise and what is signal.

However, following up on my last point on how we can use the VIX to manage our ideas, I also think that the VIX can be a source of signal for planning.

So with looking at the VIX, what can I see:

We are able to continue to put in new higher highs and higher lows on the HTF VIX = meaning we're likely to stay in a higher volatility environment for the time being.
We finished today with a HH on the VIX (see 10min chart), so early tomorrow I would be looking at how the VIX tries to form a bottom to then set up another shot higher (down for the market), or if it can hold a move lower (up for the market).

a. A move down on the VIX I believe is totally possible, as the move higher today was very momentum-based on the VIX, and the more serious lows are near 20.5 on the VIX. So the market, from the 22.5 level, could recover as the VIX falls; and the VIX could still be in an uptrend.

b. With the higher high, it could quickly make a HL and then go higher—totally.

I would say that because of the two-sided nature of a VIX environment, truly both sides could be tested.

However I would say that to start the day, because of the momentum push into the last hour of the day, that's began to fade. It will become incredibly important for trading to see the VIX make a solid higher low if it does take a serious shot higher.

If the higher low does not show the strength it needs for another move higher on the VIX, then I would be cautious to continue shorting and actually be looking for a long.

Really, anything could happen, and with the VIX so high, by the open things could look different.

However, I stand by using the VIX as the foundation for my idea creation and will be watching it very closely whichever way it goes.

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