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Marketuncertainty

Will the Fear Gauge Flash Red?The Cboe Volatility Index (VIX), Wall Street's closely watched "fear gauge," is poised for a potential surge due to US President Donald Trump's assertive policy agenda. This article examines the confluence of factors, primarily Trump's planned tariffs and escalating geopolitical tensions, that are likely to inject significant uncertainty into the financial markets. Historically, the VIX has proven to be a reliable indicator of investor anxiety, spiking during economic and political instability periods. The current climate, marked by a potential trade war and heightened international risks, suggests a strong likelihood of increased market volatility and a corresponding rise in the VIX. President Trump's impending "Liberation Day" tariffs, set to target all countries with reciprocal duties, have already sparked considerable concern among economists and financial institutions. Experts at Goldman Sachs and J.P. Morgan predict that these tariffs will lead to higher inflation, slower economic growth, and an elevated risk of recession in the US. The sheer scale and breadth of these tariffs, affecting major trading partners and critical industries, create an environment of unpredictability that unsettles investors and compels them to seek protection against potential market downturns, a dynamic that typically drives the VIX upward. Adding to the market's unease are the growing geopolitical fault lines involving the US and both China and Iran. Trade disputes and strategic rivalry with China, coupled with President Trump's confrontational stance and threats of military action against Iran over its nuclear program, contribute significantly to global instability. These high-stakes international situations, fraught with the potential for escalation, naturally trigger investor anxiety and a flight to safety, further fueling expectations of increased market volatility as measured by the VIX. In conclusion, the combination of President Trump's aggressive trade policies and the mounting geopolitical risks presents a compelling case for a significant rise in the VIX. Market analysts have already observed this trend, and historical patterns during similar periods of uncertainty reinforce the expectation of heightened volatility. As investors grapple with the potential economic fallout from tariffs and the dangers of international conflicts, the VIX will likely serve as a crucial barometer, reflecting the increasing fear and uncertainty permeating the financial landscape.
CBOE:VIXLong
by UDIS_View
Will S&P catch the Corona Virus to 3075? Or is it S&P to 3550+ My Position: Last TA I published on the S&P we had just announced a phase 1 trade deal had been reached with China. It was great timing as we need a push to get us out of the bottom sub channel we have been stuck in as we were reaching that resistance again for a 3rd time over the last year. I entered the market using slightly out of the money call options for a few months out on SPXL which is a bull S&P 3x return ETF. Before the Corona Virus, I was up 150% in a little over a month. Leading up to now: As many times as its played with breaking up out of the bottom sub-channel, its played with breaking down more. The bottom of channel is also the 10 year bull trend line, we have danced with it several times and late 2018 we had a massive break losing almost 10% value and well below the 10 year bull trendline. We recovered fairly quickly luckily and then we were bolstered with 3 rate cuts and $60Billion in QE-Lite per month still ongoing now. Dangers: Hand in hand with the Coronavirus outbreak, Fed Chief Powell signaled the feds would be looking to curb /end the QE-Lite that is not being called QE. To be fair the feds had reduced their balance sheets and incresed rates through out 2018 after a 3 years of letting things ride after 7 years of constant stimulus to the economy. Here is a great chart that shows a wealth of data in a single chart, from Reuters > USA-FED-PORTFOLIO Most likely this is profit taking after running straight up since mid October 2019 but at the same time investors should be leery of the feds turning off the tap that got this thing fired off to begin with. So as you can imagine given a recent and unquantified virus break out, an ongoing US impeachment that continues to get more complicated, a presidential election later this year, increased trade rhetoric with the European nations and a growing pool of countries resorting to negative interest rates, it is virtually impossible to know where the market will go and when it will correct. I will try to make a few points about the potential price action. ------------------- More probable possibilities: -We are positioned in a good place for S&P @ 3218 or so to hold support and retain grip on the middle channel. The reality is the phase 1 trade deal will act as a stimulus with tons of money flow this year that wasn't there last year, a relief of its own. If this support holds, the next obstacle will be S&P around 3550 around mid-march 2020, value dependent on when we reach top of sub-channel resistance. At this point we should already be starting to see some trade war relief continue the momentum pushing through resistance with slight delay and then seeing top of overall channel for the first time since December 2014. If we continue the general trend we would likely see the S&P at around 3950 by July/August. It would be a major feat to see the price action break up out of this 10/11 year channel. 3950 seems like a good exit for a long position and potentially an entry for a short position. -We could break back down into the bottom channel which if we dive to bottom of that channel has us seeing the S&P500 @ 3075 by early April. With trade rhetoric improving, only the threat of feds dropping their QE-Lite and the CoronaVirus have any ability to knock the market back into the bottom channel. This seems possible but improbable. -We could see the run lose steam as we reach the resistance of the top of middle channel and do similar as we did in 2018. How far we break above the top of the middle channel compared to 2018 as to whether the trend is improving. There is a chance we stay range bound here in the middle channel between 3250 & 3500 (currently) for most of the year, of course rising over time as outlined in the chart. -------------------------- Notes: *If you are a low risk appetite investor, consider putting your money into something more stable with a lower return until after election 2020. The market is volatile and unpredictable. My method of investing in options on 3x bull ETF's is some of the highest risk possible. If you make high risk investments, you should do so with a smaller portion of your overall wealth and pull some percent of profits out towards long holdings. If you trade crypto, please check out our market depth site @ vcdepth.io with various depth of market filters available and recently integrated TradingView charts its great for scalping and swing trading. No one else captures open-interest like we do. This is not investment advice, it is merely observations I have made during my trading analysis and I am sharing. Do your own research
SP:SPXLong
by EncryptShawn
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