The S&P 500 volatility index ($VIX) is at a critical tipping point as markets once again bounce after a big down day.
Will it be able to finally close below 29 and exit what we affectionately call "The F*$k Bucket?" It has stubbornly stayed above that line every trading day since April 3rd, causing wild swings in market prices.
In this clip from The Macro Show, Hedgeye CEO Keith McCullough explains why he is watching for that level so closely.
"The biggest question for me is, 'Is the VIX going to make its first lower-high of the cycle?' and 'Will be above its prior closing low?'" McCullough says. "If it happens, it's less bearish for the next trade. It doesn't mean I wasn't ragingly bearish a week ago. It just means that's what would make me less bearish a week later."
If the VIX stays above 29, however, Tuesday's bounce could be yet another one to fade, McCullough says.
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