Russell
When is VIX a buy? Is this a good time to buy?The truth is that it is a buy whenever the VIX gets close to 20. Since November, and especially since the war in Ukraine broke out, I've said that the VIX below 20 is a steal. The VIX has just had a mini jump because of Pelosi's visit to Taiwan, but if nothing happens between the US and China, it could fall lower.
Personally believe that stocks have another 7% higher to go, which could crush VIX below 20 for a while. However, I think this would be a bear trap and a great opportunity for bulls to go through long volatility. In the short term, stocks could correct a bit more before going higher, which could cause the index to go up a bit, though I don't think a big breakout or anything like it is coming. My long-term goal (6-12 months) remains 45-50 on the index, but it needs some time to get there, and it must inflict even more pain on all those who have been holding puts over the last year.
Keeping It SimpleThere's so much going on right now, but I think this chart sums it up for assets in general. This is a fairly simple idea I fantasized a while ago and it played out to my surprise. Every once and a while, the percentage of bullish stocks doubles, and then a selloff happens. Unless we can break this symmetry and make a clear break above 25, we should not expect anything special. It's easy to fomo in but possibly the best move is to move to other markets.
Also note the severity of the 2020 dump, before being launched by money supply expansion, among others:
We did not yet meet the level of the 2020 crash. Also, there is no money supply expansion this time. So, what would have happened in 2020 or perhaps 2008, should really happen this time, unless of course there is more money supply expansion.
Cheers and don't forget to hedge your bets!
Long Russell! - Trading w Commercials - Fading Speculators (COT)Looking at the net positions of the Commercials (Red Line), the Russell 2000 is at record high levels. Additionally, the small speculators (Blue Line - tough to see but it's blown up on lower indicator)) are very short compared to historical levels. The COT index on the bottom shows dark green when both commercials are maxed net long and small speculators are maxed net short. Use a daily chart with your favorite indicator/candlestick pattern to look for entry - be patient - don't forget a stop. See below for explanations of what you're looking at and what I'm talking about with COT
RISKS: The trend is down which makes this counter-trend trade
COT Definitions:
- COT: Commitments of Traders Reports - A weekly report published by the government (CFTC) that shows long and short positions of the below 3 groups (As well as much more data I don't look at). We look at the NET positions of these 3 groups and compare them to historical levels to signal trade opportunities
1- Commercials: Hedgers - We want to trade with them when they're at extreme levels (Think Tyson, Cargill, General Mills, etc)
2- Large Speculators: Hedge funds and large institutions - We want to fade them when they are at max positions (Think suits in NYC and commodity funds)
3- Small Speculators: People/institutions trading small lot sizes not big enough to report to CFTC - We want to fade their max positions as well since they represent the public (Think dude in his PJs trading and small trading firms)
Indicators on Chart:
- The first indicator shows the net positions of the 3 groups above plotted over time
- The second indicator is an index of the relative buying/selling of commercials over a certain lookback period. Anything above 95 is looking for buy, look to sell when it hits 0
- Note: Just because the Commercial's net position is negative doesn't mean it can't be relatively net long and signal a buy (same in the opposite scenario)
Trade Setup - Both Must Happen:
- When commercials are at max levels we are alerted to buy or sell (Depending on the criteria above)
- On a daily chart, use technical indicators, candlestick patterns, news, etc to enter the trade (not shown here)
Market Range - What are they trying to tell us?When the market range, it is telling us they are lost with the main direction. And we are seeing that between all the US major stock indices and many stocks since the second week of May. Prices basically still trading around the same price since then.
In today’s tutorial, we will discuss:
• How to identify when market started to enter into a range and
• Which direction will it ultimately break away from a range market?
The concept of “Less is More”
When we trade into a contract that is within our means, we will be able to focus on trade set-up that is so helpful for entry, stop loss and profit taking than trying to manage our emotions as we have over traded.
Disclaimer:
• What presented here is not a recommendation, please consult your licensed broker.
• Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises.
Not Cheap YetSome people say that things are getting cheap. I agree, they are in the process of getting cheap, but we're not quite there yet as far as historical bottoms go. The Russell isn't that cheap yet, still twice as expensive as in 2009. Unless a true miracle happens, it's hard to see any upside in this market as far as real wealth terms(as opposed to numerical price increase) in the near future. On the contrary, we have seen much further downsides in the past. We might see a reflexive bounce in the future and a bear market rally, though we are in a steep downward momentum.
Good luck and don't forget to hedge your bets!
Joe Gun2Head Trade - Short term bottom on Russell2000?Trade Idea: Selling EURJPY
Reasoning: EURJPY to continue lower? Broken trend and EUR under pressure
Entry Level: 1752
Take Profit Level: 1794
Stop Loss: 1741.5
Risk/Reward: 4.15:1
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US2000 has more room to fall !!RUSS2000
Intraday
We look to Sell at 1699 (stop at 1714)
We look for a temporary move higher. Risk/Reward would be poor to call a sell from current levels. The bias is still for lower levels and we look for any gains to be limited. Previous resistance located at 1700. Expect trading to remain mixed and volatile.
Our profit targets will be 1645 and 1605
Resistance: 1700 / 1750 / 1945
Support: 1640 / 1470 / 1200
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IWM Update: 28 AprilThe Russell is approaching a potential target zone. In this video I share an idea how to trade it with a Broken Wing Butterfly that will benefit from time decay during a potential re-accumulation. It has defined risk in case the selloff continues, and no upside risk in case the bounce happens earlier or is faster than anticipated.
FOMC Party is over folks!End of the relief rally after FOMC. Lots of shorts squeeze for the big expiry today. We should see a sharp pullback now.
We hit multiple resistances on Russel 2000 on multiple hourly, daily and weekly chart. Current price : 2050, Target is back to 1900. SL 2110
Disclaimer : I have short positions in Russel 2000 as mentioned here. This is not an investment advice but an educational idea.