As most of you know I watch the RVX closely. It tracks the implied volatility of RUT, which I trade a lot, so it pays to keep an eye on it. What you are seeing here is a WEEKLY chart of the RVX, and you can see that over the past couple of months things have really flattened out. I don't know if that means we are just consolidating for another leg down, or if it means nothing at all, but I'm feeling a calendar coming on.
Calendars benefit from time decay, steady prices (assuming they're neutral). and rising implied volatility. If IV doesn't rise, it doesn't hurt us at all, so long as it doesn't completely crater. Given this base it seems like the right move. And it doesn't hurt that I'm coming off of a nicely profitable calendar trade from last month. In any case, stay tuned for an upcoming featured trade, and keep on eye on the RVX.
Good Trading...
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