There is one truth in the market that every decent trader has to embrace: “You cannot fight the market.” No matter how strong you feelings are, you must always be able admit you are wrong and to walk away in order pull the trigger at a later date. It seemed that ~13 was a good barrier for the vix, but the market said otherwise as we crash towards all time lows (see figure1).
I do have a bias that volatility will be elevated in the longer horizon due to all of the debt on developed nations’ balance sheets. Take the Japanese market as a possible indication with a 30 day realized volatility of about 22% between 1991 and 2001 (see figure 2).
PRAGMATIC CAPITALISMVIX: The Race to the Bottom - PRAGMATIC CAPITALISM
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