hate to say i told you soso instead ill just say that my favorite inverse index fund is in full breakout mode! nothing is stopping this from running away with everyones presents, so if you have a gift i would share it now. that being said we are at the top of nadaraya watson envelope, and the nasdaq is in extreme oversold territory, so im expecting a bounce followed by continued melt down meaning up, up and away with our little go-go gadget short machine; sqqq.
Shortinverse
two paths for volatility (UVXY)theres a really bullish sentiment playing out on the daily, but technical indications are that we sell off a little in vix. ive circled the type of cross i want to see, and highlighted what could gappen if we dont complete the bearish pattern.
over $23 or under 16 in 1 week
Guaranteed money (UVXY)If we break to new highs it's almost a guarantee that, provided we are hitting new lows in multiple important sectors like tickers xlf, qqq, spy, we take this over 19. The only real guarantee is that whatever high we hit in UVXY we are seeing lower prices soon. low 14s is where I'm drawing these hypothetical puts expiring a me to.e early March. This is based on the simple fact that indices didn't hold their lows, and there are really two scenarios that can play out: we set some lower low as support and bounce, or we continue lower. If we go lower there's really no support. If we bounce there's really very little resistance. Low availability of shares means we're not headed sideways.
This is the bullish picture for uvxy:
This is the bearish picture:
The forecasts show my limits of how far I would long or short based on a bull/bear move from current levels. The ghost feed is just one solution to how they could both hit. If you get the right signals UVXY is guaranteed money.
front month vix futures remain overbought (vx1!)the upside in short term vix futures remains muted as limitations on how far out broader market shorts in the money puts are due to backwardation in front month contracts. this is leading to derivatives like UVXY to probably continue to sell off of overbought.
we could find ourselves back in the low 14s UVXY if we see 22 vix again which should be soon. if we go over 28 vix id imagine were headed for 20 UVXY. the weekly picture for vix is bearish.
under aavwap and breaking tightening range bearishly (UVXY)just as spx is in a buy sided tightening range top, vix is in a sell sided tightening range bear.
referto the below chart for that pattern on the 1 minute
if UVXY cant break this range bull then broader markets remain a buy as long as vix puts keep piling in
if we make a lower high and continue down this is a solid confirmation of bear vix
as long as we respect the highs another top is in (uvxy)short term vix futures have put in a multiday high and many broader market sectors are breeching their intraday lows at the same time
this could have a longer term effect, but i think the short term movement in vix will trend back toward 11.89 uvxy
if we build a base of support above 12 and move higher we could be in for more like 12.30, but keep it on the pivot and it should be fine