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The S&P 500 closed today massively unchanged from where it started the week - tame compared to last week’s mayhem. I’m seeing the words “back to normal” and “calm” thrown around a lot out there.

The VIX came down below 20 today, which might make it seem like calm is returning, but don’t buy it - literally. (I’ve talked before about the issues with using the VIX as your only volatility gauge, but that’s beside the point.)

But listen, that calm is only at the surface; it’s totally superficial. For one thing we did see plenty of volatility and choppy, disjointed trading. That’s not a sign that things are calming down.

If you look at what I’m seeing - volatility futures, among other things - you’ll see that there is still a ton of risk out there. Volatility is being “compressed” right now, and like anything you compress, it’s going to smack you in the face if you’re not careful.

It is not safe to go back in the water - at least unprepared. Here’s how to get ready…

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