Adrian's Crash Dash
This is a set of charts that I use as a dashboard to quickly judge the amount of risk I should be taking.
Here's my checklist for judging how long I should be and if I should BTFD or STFR:
Chart 1 (top most chart, ES1!)
1. Bollinger Bands:
a) Are we in an overbought/oversold situation as judged by the Bollinger Bands?
2. RSI
a) Are we in an overbought/oversold situation as judged by RSI?
3. Trend
a) Is the trend down or up?
b) If the trend is down, wait for a reversal pattern or capitulation.
4. Levels given by AVWAPs
a) In practice I've noticed that AVWAP's may represent potential areas of support or resistance.
5. VIX-ES1! correlation
a) Positive VIX-ES1! correlation is a warning sign and showed up prior to several pullbacks such as 6/11/2020, 9/2/2020, 7/15/2021.
i) I also look at the trend of the VIX, VXN, and RVX.
I focus most on NQ1! & ES1!, but will occasionally look at RTY1!, YM1!, & EMD1!.
Chart 2 (second from top, US30Y)
1. Is the trend down?
a) The bond market seems to price in inflation/deflation faster than equities, and with less noise. Rapidly rising yields is a risk for the duration trade due to the DCF narrative. It is a warning sign that showed up prior to the 2/19/2021 pullback in growth.
I will occasionally look at US10Y.
Chart 3 (bottom, smoothed PCQ)
1. Put/call equity allows me to asses the street's positioning. I have highlighted my green buy zone, and orange and red danger zones.
High put/call shows that the market can climb a wall of worry. Low put/call is indicative of overly aggressive positioning.
Ebullience tends to show up first in the Nasdaq's put/call measures (PCQ.)
I typically iterate through several different versions of put/call ratios and put/call equities:
- PCQ
- PCQE
- PCCE
- PC
- PCC
- PCSPX
Here's my checklist for judging how long I should be and if I should BTFD or STFR:
Chart 1 (top most chart, ES1!)
1. Bollinger Bands:
a) Are we in an overbought/oversold situation as judged by the Bollinger Bands?
2. RSI
a) Are we in an overbought/oversold situation as judged by RSI?
3. Trend
a) Is the trend down or up?
b) If the trend is down, wait for a reversal pattern or capitulation.
4. Levels given by AVWAPs
a) In practice I've noticed that AVWAP's may represent potential areas of support or resistance.
5. VIX-ES1! correlation
a) Positive VIX-ES1! correlation is a warning sign and showed up prior to several pullbacks such as 6/11/2020, 9/2/2020, 7/15/2021.
i) I also look at the trend of the VIX, VXN, and RVX.
I focus most on NQ1! & ES1!, but will occasionally look at RTY1!, YM1!, & EMD1!.
Chart 2 (second from top, US30Y)
1. Is the trend down?
a) The bond market seems to price in inflation/deflation faster than equities, and with less noise. Rapidly rising yields is a risk for the duration trade due to the DCF narrative. It is a warning sign that showed up prior to the 2/19/2021 pullback in growth.
I will occasionally look at US10Y.
Chart 3 (bottom, smoothed PCQ)
1. Put/call equity allows me to asses the street's positioning. I have highlighted my green buy zone, and orange and red danger zones.
High put/call shows that the market can climb a wall of worry. Low put/call is indicative of overly aggressive positioning.
Ebullience tends to show up first in the Nasdaq's put/call measures (PCQ.)
I typically iterate through several different versions of put/call ratios and put/call equities:
- PCQ
- PCQE
- PCCE
- PC
- PCC
- PCSPX
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