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Based on the options volatility analysis:
- When the underlying market and volatility rise in tandem, it often indicates the market is in the final phase of a short-term rally, and when historical extremes are reached, the trend is typically nearing its end;
- When the underlying market rises steadily while volatility gradually declines, the probability of a range-bound upward drift is higher;
- When the underlying market falls and volatility expands simultaneously, there is often significant short-term downside risk (e.g., early March 2020, mid-to-late February 2021, January 2022, etc.), and when historical extreme zones are touched, the decline is often approaching its end.
The current state is characterized by "the underlying market remaining stable or edging slightly higher while volatility continues to trend lower," suggesting a higher probability of a range-bound upward market.
In addition , taking the CSI 1000 as an example, the index is in a range-bound upward structure, and the volatility skew shows a mild left skew, indicating that the market remains rationally cautious during the uptrend
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