Last week, options markets went from loud to almost eerily quiet.
That silence is not necessarily good news.
In my world, option buyers are like birds in a forest. They’re the market’s early-warning system. When danger shows up, they’re the first to cry out. When opportunity arrives, they’re the first to swarm in.
If you don’t know how to “listen” to them, you’re effectively walking through the woods without realizing a bear might be nearby.
The good news: you don’t need to track every option trade on the planet.
You can watch just one number:
The CBOE Volatility Index — the VIX.
When put-option buyers are nervous, they bid up volatility and the VIX rises.
When they relax and stop buying protection, the VIX falls and risk-on buyers take over.
Most of the time, that story is fairly straightforward.
But not right now.
The VIX at 20: A True Inflection Point
When the VIX hovers around 20, buyers and sellers are in an uneasy truce.
20 is widely seen as the dividing line between calm and concern, between bullish and bearish.
Over the last two sessions, the VIX has pushed in different directions but closed back near 20 each time.
That’s the market saying:
“We don’t know which way this breaks yet — but we know it matters.”
In practical terms, that means one of two things is likely ahead:
VIX breaks higher and stays above 20 → selling pressure, choppy or downward-trending markets.
VIX breaks lower and stays below 20 in the next two sessions → fear drains out, and we have room to run to new highs.
Right now, the market isn’t telling you where it’s going next.
It is telling you that investors are on edge.
Why This Week Matters
This week’s open and follow-through will tell us whether:
Bearish sellers take control and push a more sustained drawdown, or
Bullish buyers step back in and drive a new leg higher.
Headlines will try to pin every move on something:
Geopolitical news
Jobs numbers as agencies reopen
Speculation about the December FOMC meeting
But underneath all of that, the real story will be in the VIX.
If the VIX closes above 20 and holds there, odds favor more downside and we stay on defense.
If the VIX closes back below 20 in the next two sessions, opportunity may be just around the corner — and we’ll be ready to go on offense.
Inside Venture Trader, I’ll be watching this closely and using it to frame new trade ideas for members starting Tuesday morning.
Watch what happens around 20 this week. It’s likely to be a high-impact stretch for anyone with money in the markets.
Regards,
Gordon Scott
Head Quant, Venture Trader
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