The strong volatility in the market the past few days is an indication that market is now getting worried about the Debt talks in Washington as the deadline approaches (which wasn't the case before, as the market was anticipating a solution as both sides come together. Opposite is the case at this time as both sides seem to be moving further apart while they come on TV and say things will be resolved. Talking the talk but not walking the walk. At this point the market is tired of the TALK and wants the WALK, hence the pickup in volatility).
VIX is significantly above it upper Bollinger Band (BB) at this time (see my VIX chart). In an ideal environment, this will indicate a reversal back down for the VIX (and rise for the mkt). But in the current environment, the VIX can double, triple, quadruple etc from here, regardless of the BB as fear level rises due to uncertainty caused by the useless congress.
The market remains bullish longterm based on my technicals. But technicals are about to become useless if this Debt talk is not resolved. I positioned myself by buying Out-of-the-Money (cheap) VIX Calls (based on news) while long the SPX (based on technicals) just in case the market collapses. So i'm trading based on news and technicals.
I don't care about politics for exactly what is happening in Washington now. I hope they get their act together and get off the screens and every website and stop messing up the market/charts. Congress is now a virus on my computer because I see Debt Limit crap everywhere. Congress should pay their bills just like everyone does. I NEVER knew paying bills was debatable (thanks to congress, i will stop paying my bills so that I can help congress send US and the world into greatest depression (not great depression) caused by US politicians). What a joke.
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