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SVXY

SP500, SPY - The End is nearSP500 Daily Chart Did you like my title? "The end is near". BUT NOT YET. I'll explain. First on this daily chart I would like to point out that we dropped a little bit over the last couple weeks. The hidden bearish divergence on the RSI below played out. But as you can also see, we have a larger hidden bullish divergence that has formed. Look at the last hidden bullish divergence and you can see how we made new highs shortly after. Well this divergence is a little bigger. So I do think we will be ramping up hear very soon and I do think we can reach somewhere around the 2500 range (to complete this larger 1st wave) before the larger corrective 2nd wave begins. Yes, only wave 2, not the END. That comes later. So lets look at some possible key events that could trigger the wave 2 correction. (and the correction should be a decent 10% drop). 1st, I do not think the FED will raise rates in May. Even if the market is up to 2500 at that point. The reason being is that I think the fear of the French election will keep the FED at bay. So there is a 2 round vote in France. The first one is April 23rd and the second is May 7th. I think the Brexit and Trump affect will win the day in France and Le Pen will be victorious. But the media wont say that. So that could have a similar affect as Brexit did. And thereby bring a little shock to the Markets. But that wont last long and we will start a hefty larger wave 3 of wave 5. I will post my Monthly or weekly chart next to show you what I see is happening. This market has structure and it is playing out like I see it.
TVC:SPXLong
by SalN
3
SP500 March 5th 2017Weekly Chart I just thought I would do an update to where I think we are in the broader markets. 1st I thought I would post this weekly chart so you can see my count as to when the "BIG CRASH" might (might take place). I am thinking not until the next presidential election. That's just a guess. Nothing special about it. But I think the Trump policies, once allowed to happen, will be great and very hyper bullish for the markets. That, combined with the flight capital leaving Europe which will inevitably make it to our markets as Europe implodes will propel the market super high. Who knows, I might be conservative on my chart. Time will tell. I think this spring we will get that correction that some people have been talking about. But before we do that larger pullback (which would be a wave 2 of the large wave 5) I think we will see the sp500 reach approximately 2500. I do think that we will get a rate hike in March but then, just like last time, we should shoot higher to that 2500 mark. This would encourage the Fed to raise again. The Fed likes to hike if the market shows it can handle it. For example, If we crashed down to 2000 with the March rate hike then I absolutely not believe they would raise again for a long long time because that would show weakness in the market. I will put up the daily next to show what I mean.
TVC:SPXLong
by SalN
SP500 Rate Hike Feb 1st ?? I do believe soI have been giving it some thought and I have a feeling that there will be a rate hike on February 1st and I will list my reasons. #1) We are currently in the micro wave 5 which wont last until the March 14th Fed meeting. 2) The CME group has a FED Watch tool that gives a percentage for the likelihood for a rate hike for this year.....and for Feb 1st we are at 96%. #3) the RSI is showing a good sized bearish divergence that you can see below. #4) we have not had a DCL low since November 4th and we are about due. #5) the market barely took a hit at the last rate hike and now the DOW just broke 20,000 which usually lets the FED know that the market can handle a rate hike. So then, if they do hike what could be expected for a drop in the SP500? If my wave count is correct and we are currently finishing wave 3...and this correction would be a wave 4, then we shouldn't be able to drop below the bold black line with the blue arrow which is 2194 max. But a more likely target for me would be the 100 DMA which should be approximately at 2210 - 2215 range by that time. Last little tid bit> what looks reasonable for a target price by February 1st. Well, you will know on that day or the day before but I am thinking that we push up to just over 2300, maybe up to 2310. Which we are almost there. GL
TVC:SPX
by SalN
Current Market StatusWe are not experiencing a traditional "January Effect", this market is showing a strong consolidation period; with clear trends migrating towards the downside. Will this trend reverse to the upside? The answer to this question can be clarified with an analysis of the VIX. Currently, VIX is trending to the upside, this would be an indication of the return of a "bear period" leading to a large correction. Deeper understanding of the numbers: Support: 19,963.80 Resist: 19,732.40 volume range Upper: 573,470,000.00 Lower: 158,260,000.00
DJ:DJI
by MontangeUpdate
THE WEEK AHEAD: SLIM PICKINGS FOR THE PREMIUM SELLERWith VIX at sub-12 levels, broad market implied volatility is low here, and a basic screen run for high implied volatility rank/high implied volatility yields few high quality results. Here's what I'm looking at ... . SPY et al (Broad Market) The first expiry with greater than 15% implied volatility for SPY is in the June expiry. The most I like to go out with these is around 90 DTE, so no play there unless you like to watch paint dry. (The theta decay of a June setup would be painful to watch). Earnings The only earnings play next week with >70 implied vol rank/>50 implied vol is $NFLX, which announces on 1/18 after market close. I'll probably play that with my standard volatility contraction setup, which will either be an iron condor or short strangle, although I could also see just playing it with a 20-delta short put (bullish assumption). Non-Earnings The only playable individual underlying without earnings on the horizon appears to be P, but the only worthwhile setup due to the price of the underlying would be an ATM short straddle, 45 DTE. It looks like that would pay 2.00 or so at the door; shooting for 25% max profit would yield about $50 per contract. Exchange Traded Funds There are literally no sector exchange traded funds out there that meet my criteria for a premium selling play (>70% implied vol rank; >35% implied volatility), unless you count $GDXJ (junior gold miners) and $UNG (the natty gas proxy). With $GDXJ, I'm contemplating the simplest play out there -- a naked short put (bullish assumption). Unfortunately, however, I missed the "meat of the dip," so am hesitant to pull the trigger here against a backdrop of Fed tightening and therefore Greenback strength going forward. I'll post the $NFLX, $P, and $GDXJ plays if I decide to play ... . VIX/VIX Derivatives I continue to keep an eye on VIX "front month" futures. The Feb expiry is currently trading at 14.20-ish; the March, at 15.70. The Feb is a bit low for my tastes on which to base a VIX term structure trade; I already have a March setup on; and VIX is too low for a "Contango Drift" trade in one of the derivatives. My original intention with UVXY was just to slap on an ATM short call vert post split, but the options chains have been somewhat slow to populate for the standard contracts. You will see the chain with both 20's (the nonstandard contract for options that were on when the split occurred) and 100s (the standard contract). Some care needs to be taken not to accidentally enter a trade in a non-standard or a combo of a standard and a non-standard ... .
TVC:VIX
by NaughtyPines
sp500 One more Bullish week? 2298SP500 Daily Chart It appears that we are in our micro wave 5 move to complete this bigger wave 3. That's how I see it anyways. And I think we can make it to almost 2300 before the DCL rollover. It just never seems to be able to make it all the way through those milestones marks the first time. If you zoom out you will see my little cycle indicators and if you zoom out further you can see the larger cycle indicators. But these seems to shift overs the years. But it appears to be about right for the present. I posted the RSI and you can see that even if we do make it to 2300 range, we are likely to have a bearish divergence. What is really scary is if you jump to the monthly charts, you can see a huge bearish divergence on the RSI from back in early 2015 to the present. When that will play out is a guess but I still think we climb to 3000 in late 2019 before the crash. And I think the November 2019 Presidential Election will be the Catalyst. That's is just my crazy long shot opinion. So looking for at least one more up week for the Markets. Dow will break 20,000 this time. Its ready, I can feel it.
TVC:SPXLong
by SalN
SP500 Vix start of 2017Daily chart for SP500 So I saw someone else's idea about wave count with the SP500 and he may be correct. I was always wondering about the correction we had that ended in November. As you can see it dipped well below the August 15th peak. That is not suppose to happen if that was a Wave 4 corrective move. So another person had an idea that the end of the Brexit dip was nothing but the end of a very large correction from the previous large long rally. So I moved the wave count as it is now shown on the chart in blue. That would mean that we are just starting wave 4 correction which shouldn't be as deep (percentage) as wave 2 was. So that would bring this correction to most likely the purple line channel and at best we should not break the bold black horizontal line. A break of that black line would once again nullify this wave count. Not to mention, we are only due for a short term cycle correction "DCL" and not due for a ICL for a couple months. That being said, I am going to guess that we have the next rate hike on May 2nd which should help trigger the ICL to start. I am currently in TVIX right now for a small gain. I do not see this dip lasting much longer this week. I do not think I will revisit the VIX until we are due for a bigger better drop in the SP500 DCL in March.
TVC:SPX
by SalN
WHAT I'M LOOKING AT FOR EARLY 2017: VIX/VIX DERIVATIVE PLAYSWith Dough transitioning over to TastyWorks (it's basically Dough on steroids), I'm looking to wind up positions I've got on here over the next several weeks so that I can transition over to TastyWorks, which will not interface with TDA accounts. While I can naturally use ThinkOrSwim (ToS), it just doesn't have the features of Dough that I've come to know and love. Call it laziness, lack of "platform fluency," or a geezerly unwillingness to change, I'm not willing to "do without my Dough." My original intention was to wind up everything in time for the TastyWorks roll out (Jan 3rd), but I figured I would just "carry on" until TW was firmly up and running, the mad rush at the TW doors had ebbed, and the inevitable glitches or kinks had been worked out. It is, after all "a new broker," and shit can happen ... . Generally, I prefer that shit happen to someone else. Okay, call me "lazy" and selfish. In any event, being somewhat hobbled by the unavailability of Dough IVR/IV screeners here (I have other tools to screen for those, but they're extra work), my focus is going to pretty much be solely on short volatility product plays here over the short run, with the emphasis being on VIX "Term Structure" plays and "Contango Drift" plays in VXX and SVXY (UVXY is getting awfully close to reverse split territory, and I don't want to be in the middle of an options play when that happens; they're "messy"). Unfortunately, these are some of the most boring plays out there. For "Contango Drift" plays, you're basically sitting on your hands a lot, waiting for a pop in VIX, preferably to >20, and you can be waiting literally weeks for those to occur. With "Term Structure" trades, you put them on and wait sweatily for the VIX futures price to converge on spot, ideally below your short call strike before your options expire. If they don't, you look at rolling your spreads out for duration, which means (you guessed it), additional waiting for volatility to "come in." I'll look at posting a "Contango Drift" example here, since I've already got some "Term Structure" examples out there to look at ... .
CBOE:VXX
by NaughtyPines
1
EXAMPLE: VXX 30 DTE X/X+3 ATM SHORT CALL VERT (CONTANGO DRIFT)As previously noted in other posts, the short volatility product plays I like most are "Term Structure" plays in VIX and "Contango Drift" plays in VIX derivatives, with the preference being toward the latter play, since you're getting in on a pop in VIX and then taking advantage of "Contango Drift" in the derivatives to the downside (in UVXY, VXX; SVXY is an inverse, so you're looking to take advantage of "Inverse Contango Drift" to the upside). Here's what I'm looking to get into a "Contango Drift" play: 1. A VIX pop to 20 or greater. For various reasons which I've elucidated before, I use the VIX price as a guide to enter these plays and not the price of the derivative itself. That being said, some traders use a 2 SD Bollinger Band as a rough guide as to when they would want to consider an entry. I really can't poo-pah that, since the last two BB touches (indicated by green arrows) would have been winners. 2. An ATM Setup That Pays at Least 1/3rd the Width of the Spread. I generally go with an ATM credit spread for which I get at least 1/3rd the width of the spread in credit (i.e., for a three-wide, I look to get 1.00 ($100) in credit per contract). This may require some "putzing" with the spread, moving it up or down in relation to current price. 3. Roll Out for Credit/Duration If Price Has Not Broken Short Call Strike by Expiry. No one likes to roll out for duration, since it usually means that the setup is "broken" and you'll be booking a realized loss in the short term if you do that. However, with contangoized setups, time/duration is on your side; the longer you hold the setup, the more likely it is that contango will work its fairly inevitable magic on it. 4. Go Small, Since "Shit Happens." Unfortunately, markets don't always "behave" the way we'd like them to. VIX can "elevate" for periods of time that are longer than we'd all like and send the derivatives into temporary periods of backwardation that aren't favorable to these setups; they'll be underwater and you'll be holding them longer than you'd like. Going small allows you to ride out periods of backwardation, as well as keep buying power free for getting into similar setups "higher up the ladder" if that sort of thing happens. If we do get a VIX pop to greater than 20, I'll post an actual trade setup. In the mean time, hand sitting ... .
CBOE:VXX
by NaughtyPines
Tvix sp500Tvix is almost out of room in this descending triangle. I obviously don't need to talk about being oversold on the Vix and in a long long rally in the market. I see some analysts are talking about no sell off until after the 1st of the year due to lower taxes under Trump, just like I had suggested a few days ago. Only a few more days to prove that theory wrong or right. So I put a few arrows where I think the price movement will possibly go in the next few day. Including a gap up out of the wedge next Tuesday. So I will probably give it a go once again in Tvix and buy in in the next couple days. Probably before the weekend.
TLong
by SalN
SP500 Christmas Time2HR Chart At this point I do not believe that we will get a sell off before the end of the year. I know that usually happens for tax purposes but I have an alternative theory. I think a lot of people will not sell until after the 1st due to not wanting to have Obamas high tax rate affect them versus Trumps tax cuts next year. I think it will be difficult to get past the 2285 area as I just don't think it will break above the long term channel line. Tomorrow may show us the way as it appears we are in an ABCDE bull pennant. And the way it is set up suggests that the break out of that pennant will be a short lived push up. I am not sure about the holiday trading days but I will be trying to figure out a good entry for a short term trade on the VIX.
TVC:SPX
by SalN
1
SHORT VIX DERIVATIVE PLAYS: GIVE THEM TIME TO WORK OUTAn interesting article on shorting the VIX and VIX derivatives: www.marketwatch.com In a nutshell, backwardation occurs (which only applies to VIX derivatives, not to the VIX itself) and this can "derail" a short VIX derivative play that is not given enough time to play out and for contango to kick in and start its inevitable erosion of the underlying, whether it be VXX, UVXY, XIV (inverse), or SVXY (inverse). And although this only shows contango/backwardation for the years 2007-2012, one theme is evident and that is that the market is in contango the vast majority of the time (on average, >75% of the time): www.cboeoptionshub.com In essence, then, the caveat to shorting VIX derivatives in reliance on contango being a constant on top of VIX mean reversion really should be a caveat against shorting and assuming that it will work out "immediately" or even "fairly quickly" (relative terms, I know). The practical crux of this is that if you short VXX* during a VIX >20 spike with, for example, a short call vertical, and it doesn't break your short call as you approach expiry, well, roll it out for duration to a later expiry and give it more time to work out. After all, history says that for >75% of the time, contango will be on your side, even if you have to wait a little longer than you'd like for it to have the desired effect ... . * -- Alternative plays would be to short UVXY with a short call vert, long SVXY with a long put vert (it's an inverse), or go long XIV (it's not optionable; you'll just be stuck with stock). With XIV, since you'll be holding long stock, you're only option is to "wait it out."
CBOE:VXX
by NaughtyPines
SP500 SPX TVIX Rate Hike ThoughtsTVIX Daily Chart SO I decided to start off with the TVIX chart. I measured the price movement of TVIX during the last rate hike which equaled out to approx. 150% which I measured on this chart from a starting price of $10. Then I measured the flash crash that occurred before that which equaled 250% which I posted. Some interesting things (maybe wishful thinking). The Fed still raised rates a quarter percent even after that flash crash. The difference this coming week is that we are in rocket ship mode in the stock market. My hope is that the Fed says to itself, here is our chance to do a half point rate hike. That would be a bit of a surprise for the markets and then maybe just maybe we can reach the 200DMA for the TVIX chart which as you can see would also be near that 250% move. The other thing I posted on this chart is a yellow circle that says "Approx target for the weekly BBand head poke". I will post the weekly for TVIX after this and show you the two head pokes above the BBands for both the flash crash and last years rate hike. SO I thought that is significant enough to through that on this daily chart of where I think that head poke range would be is there happened to be any consistency in that regard. And no, I do not think we can possibly reach the 50MA for the weekly. Just a dream.
TLong
by SalN
SP500 Italy Vote WeekendNothing too difficult here. I think that Italy will vote to leave the EU and we will have a little correction. BUT, I just don't think it will be that great. I am aiming for the blue box. In other words, a retracement to the 38% to 50% then bounce right before the rate hike. I do not think this vote will be as great as the Brexit because it appears to have been talked about sooo much that it is partially priced in, IMO. I bought into TVIX for a short pop. I will post the chart as I see this playing out.
TVC:SPXShort
by SalN
S&P 500 last week November 2016Daily Chart We are still on track and have not yet made a micro wave 4 correction for this larger wave 5. This is the last week before the Italy vote. It appears that we will move up until maybe Friday. The vote is on Sunday the 4th so we should see a day or two drop starting Monday maybe down to the 2206 range. Then we could see another sharp move up like what happened after Brexit but of course not as huge as Brexit. If this plays out the way I am envisioning it, then I think we could see a hard push up to 2250 - 2280. There should be a great shorting opportunity for this rate hike. That's my take on how this is going to work out. The black line marked with a red arrow is an exact measurement of the December 2015 drop including the time frame when it bottomed. This does not mean that we will follow this exactly but is useful for reference. And as you can see, depending on how high we go, the 61% retracement is right there at the long term trend line.
TVC:SPX
by SalN
S&P 500 Nov 11Wow what a push. We completed micro wave 1 of the larger wave 5. We are consolidating in micro wave 2. Not sure where that will stop but it looks like it wants to walk along the top of that blue wedge. Then a real big push up for micro wave 3 should occur next. And by the looks of Wave 1, I would say it should hit the top of that black upper trend line. That little red line at about 2280, is a 100% gain of the larger wave 3. Not sure if we hit that or start a rounding top for micro wave 5 just like 3 and 1 did earlier in the year. But who cares. This sucker is flying and if this keeps up, which it looks like it will, we will have that rate hike. And with a rate hike from these heights, the gains on the Vix should be enormous. Can't wait. If we do make it to that 2280 mark, look at the 61% Fib retracement for a correction. Its right near that bottom of that long term uptrend line. The point is, big money is ahead. Be ready for the drop. AND IT'S NOT A STOCK MARKET CRASH!!!! We will take off from after February and fly to the moon or at least much higher similarly to what happened in early 2016. We should reach 3000 by sometime in 2020. That's right! I said it. I don't care what you are hearing from the TV dumb asses. This ship will not go down until Europe and Japan go first. WE ARE THE CABOOSE! Always have been, always will be. And while Europe and then Japan fall apart, their money will find a safe haven in the US markets for a short while. Until its time for our Ginormous Super Hyper HOLY CRAP Bubble to burst. We should start to see perhaps a rounding top in the year 2020. And then it will be time for the cycles (Plural) to bring down the house. If you want to know how far down, Just draw a trend line from the bottom of the 2001 crash, then the bottom of the 2009 crash and extend it to about 2022. Then you will know just how bad its going to be. Personally, I am selling my house in the year 2020. No Joke. I'll by a mansion in 2022-2023 for a Yuge discount. But I am getting ahead of myself. Lets just focus on December 15th - 16th. Good Luck
TVC:SPXLong
by SalN
1
SHORT VOLATILITY RELOAD: SVXY DEC 16TH 62/65 SHORT PUT VERTICALUsing the Bollinger bands as a guide, I'm looking to reload a short volatility play should I be able to get a fill for the right price ... . Here, I'm looking for the basic 1/3rd the width of the spread for a fill price (i.e., 1/3rd of 3 = 1 or $100). I'm setting it up as a GTC order that will expire some time next week. I'll then have another look at the Bollinger Bands, see if they've changed and tweak my spread accordingly. If it gets filled at some point, I'll look to manage it at 50% max profit or $50/contract. As always, these short volatility plays are a "money, take, run" proposition.
CBOE:SVXYLong
by NaughtyPines
OPENING: SVXY NOV 25TH 72/74 SHORT PUT VERTICALI did this one on Friday on the volatility pop we had, but didn't get a chance to post ... . I got it filled for an $87/contract credit, but could have done better were I to have had time to do some price discovery. SVXY isn't the most liquid thing in the world, so it pays to be patient and fiddle with getting a fill $5-$15 above the stated mid price. Here, I'm looking for volatility to collapse going forward from these levels which, for SVXY, means that it will move upward with both the combination of VIX collapse and contango. If I'm unable to take profit at 50% max of the setup at expiry, I will roll it forward for duration and credit ... . Notes: Variations on this play: look to sell an ATM short call vertical in either VIX, VXX, or UVXY, assuming that VIX remains at this level for a period of time (e.g., a VXX Nov 25th 33/36 short call vert; $93 credit at the mid; max loss/buying power effect: $207/contract).
CBOE:SVXYLong
by NaughtyPines
S&P 500 and possible VIX play4 hour chart for S&P 500 So as promised, here is my take on the S&P 500 and where I see things moving in the next two months. I feel very confident that we have just completed the 4th corrective wave of this 5 wave impulse. As you can see, this 4th wave is shallow and complicated. And the 2nd wave (Brexit) is deep and cleaner. So all that is left is the 5th wave. I placed OI options price targets in the chart. I also measured what 50% and 75% gain of the 3rd wave would take us as far as the 5th wave is concerned. For the 50% growth price target, we would reach 2215-2216. For the 75% growth price target, we would reach 2240. However, price action will dictate the final outcome. I also measured the amount of time in days and bars for wave 3. So what my analysis is pointing to, and what I am leaning towards, is a micro 5 wave growth, topping around the 2215 range (red line). I just don’t think we go much higher because it seems too steep for those OI price targets. Either way, it appears that we will make all time highs. (blue line signifies the last high) ATH’s will help solidify the Feds decision to raise rates as they would not raise rates if the market showed weakness like it has this last couple weeks. It appears we top around the end of November and start a steep ABC correction, with C being the big one that would coincide with the Interest Rate hike. Unless we get a black swan event that triggers this fall (doubtful) I am pretty sure they raise rates in December. So I will be playing the VIX at the end of November. If anything changes then I will update this post. And just to touch on Yellens latest comments. Of course she and others are going to start to be Dovish. They want the market to go up so they can raise rates. Talking like she is uncertain is BS and helps kick start this 5th wave. So there it is, short and sweet. Hope you like it and hope it is helpful.
TVC:SPXLong
by SalN
7