The Bollinger Band of VIX index has been contracting gradually in the past couple of months. It indicates that the volatility of VIX index has been decreasing, on the other hand it also implies that the volatility of VIX index is ready to go up again due to mean reversion. Theoretically, it can either penetrate through the top band or the bottom band. However, I am inclined to say that it will explode to the upside this time. The reason is that the TRIX index is showing a trading signal. The fast line has crossed above the slow line. Currently it is at -0.61, watch this index carefully, if it goes above 0, the VIX index can explode much higher.
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