The VIX is now near 14.50, ?and IV is now back at 75%. ?Sounds great, except that is still elevated relative to where the lows have been over the last year or so. ?So the question is, ?is the market ready to start a normal move higher, ?or is this a simple break before China and Russia cause more problems? ?Keep an eye on the range the VIX trades in, since the VIX topped 20 last month it has failed to hold below 14, additionally IV of the options stayed high and kept creeping higher. ?Take a look at the chart below:

031914Sebas1

Livevol (R)?www.livevol.com

Notice the level differences and where IV hung out prior to January. ?Vol has yet to recover. ?If the market is going to slow down and make a calm move higher, ?IV needs to come in.

The Trade:

If Vol is moving to 13, ?VXX is going to drop from 43.5 to 40 in a hurry. ?It might finally make sense to be short it.