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UVXY

UPDATE --- MADE A KILLING TODAY The Sentiment on 12/2 was 93% Bullish . As I noted: “In general it is never a good idea to Buy on High Sentiment.” We have seen that every extreme cluster of Low Dorsey Sentiment have been ideal time to Buy zones. However, it is little recognized that “High Sentiment and Low sentiment are materially different in that they represent different aspects of the Emotional Market Brain.” The 5% Bullish on Thursday has been followed by 2% Bullish today after yesterdays’ dramatic declines. Stocks are trying to recover this morning and that may continue to some extent. However if the market remains relatively weak and there is low Sentiment on Monday, it could register a MEMBERS ONLY [/b Negative Sentiment Cluster and fit with the profile for declines into MEMBERS ONLY [/b time zone. However, given that the Price High and Key Reversal from the 93% is only, MEMBERS ONLY [/b,” the best profile resolution is for generic weakness to persist into MEMBERS ONLY [/b . There is overt and obvious support down to the MEMBERS ONLY level. Thus it may yet turn out that this profiled hiccup is still just more Range Trading. The interesting idea that I provide is that there are short term profiles within the longer time frames that most investors are focused on and/or seduced by. There are high probabilities profiles that don’t require long winded cognitive rationales. I had surmised that the “Seasonals would NOT be typical this year.” After this downside surprise, there is due to be an MEMBERS ONLY and then perhaps another MEMBERS ONLY [/b into year end. Let’s take it one trade at a time. I repeat: “Thus, this is not the time for Big Bets and Out-sized trading positions.” .Don't be on the wrong side!!!! click on the link below to see what Woody Dorsey has to say and if you want more information This link will provide a free report www.sentimenttiming.com
FX:SPX500Short
by sentimenttimingnewsletter
Sentiment Timing - DEC/4/2015 - THIS DROP WAS COMING The Sentiment on 12/2 was 93% Bullish. As I noted: “In general it is never a good idea to Buy on High Sentiment.” We have seen that every extreme cluster of Low Dorsey Sentiment have been ideal time to Buy zones. However, it is little recognized that “High Sentiment and Low sentiment are materially different in that they represent different aspects of the Emotional Market Brain.” The 5% Bullish on Thursday has been followed by 2% Bullish today after yesterdays’ dramatic declines. Stocks are trying to recover this morning and that may continue to some extent. However if the market remains relatively weak and there is low Sentiment on Monday, it could register a MEMBERS ONLY Negative Sentiment Cluster and fit with the profile for declines into MEMBERS ONLY time zone. However, given that the Price High and Key Reversal from the 93% is only, “ MEMBERS ONLY ,” the best profile resolution is for generic weakness to persist into MEMBERS ONLY . There is overt and obvious support down to the MEMBERS ONLY level. Thus it may yet turn out that this profiled hiccup is still just more Range Trading. The interesting idea that I provide is that there are short term profiles within the longer time frames that most investors are focused on and/or seduced by. There are high probabilities profiles that don’t require long winded cognitive rationales. I had surmised that the “Seasonals would NOT be typical this year.” After this downside surprise, there is due to be an MEMBERS ONLY and then perhaps another MEMBERS ONLY into year end. Let’s take it one trade at a time. I repeat: “Thus, this is not the time for Big Bets and Out-sized trading positions.” .Don't be on the wrong side!!!! click on the link below to see what Woody Dorsey has to say and if you want more information www.sentimenttiming.com
FX:SPX500Short
by sentimenttimingnewsletter
1
S&P 500 showing signs of near-term collapseComparing a few of the technical patterns that occurred before and during the massive corrections of 2000 & 2008, the S&P is showing signs of another large correction looming. (Again after ~ 7-8 years of bull-run). These types of monster moves play out over a period of months / years and therefor it would be diligent to observe these and other indicators over the next few weeks in order to determine whether a big move to the downside has in fact already started.
SP:SPXShort
by snoooop40
6
Update on VIX /VXV - Volatility contango intact but muted.Volatility traders over the last weeks have been seeing a "flattening" of volatility structure and have not been getting the returns they were expecting for contango trades. (If you want to see contango at work, pull up a 5 year chart of UVXY. Those losses? Contango.) These charts show what is happening. The VIX (short term volatility) is rising from its depressed levels in late May while VXV (90 day volatility) is rising at a slower rate from a deeper fall in May. Why is that important? Remember that all of these volatility ETNs / ETFs have "roll." Roll is the daily sale of short term volatility and purchase of mid term volatility. Where do they get their supply of short term volatility to sell? From holding the mid term until it becomes short term. Just about any volatility symbol you can buy or sell employs such a strategy. So how does that create a flattened volatility structure? Simple. On some days that the VIX spikes a bit, those short term volatility sales (purchased as mid term contracts weeks before, when the VXV was depressed too) are actually profitable. Normally there is loss due to theta and risk premium. But all futures players know that the key to winning is entering and exiting at a price move before theta and premium gets you. Well these ETFs are doing that on a few days here and there by pure luck. Most days theta and risk premium produce the deep contango that vol traders love. Do the math - as the VIX slowly rises so will the VXV, but if the VIX leads (which it is doing now) then there will be more days where those purchased-as-mid-term-and-sold-as-short-term vol contracts pay. Certainly not every day - just some days. The structure is flattening also in part due to the volume of trades these ETFs / ETNs (and the array of HFT systems that arbitrage them and their underlying trades) generate. There is a "tail wagging the dog" effect that this volume has created that didn't exist when vol futures were only affected by OTM Put bidding on the S&P. More and more trades bypass OTM Puts and go straight to volatility. The VIX itself doesn't "see" those trades (partly why it is historically low and is likely to stay low.) The VIX/VXV ratio chart on the left shows us this "flattening" as we touch that magic .9 threshold that induces backwardation fear. I placed an indicator underneath it that shows the contango rate movement of one of the highest volume vol ETNs out there - my fav of favs, UVXY. The orange line is the daily contango rate. A spike above 1 generally means the contracts rolled that day were at a profit and below at a loss. The white and black lines are smoothing functions. Notice the black line rising slightly but still under 1? That means one thing: Volatility contango is intact but muted. The VIX will bounce around day to day and should continue rising such that we see spikes into 17s once in a while again. So there will be more days where the roll is a winner. But over all it remains a loser. Just look again at that 5 year UVXY chart.
CBOE_DLY:VIX3M
by codypd
UVXY pattern - is volatility about to return?Because of contango, patterns on UVXY are hard to read because it is a bit like a fun house mirror - you get a completely warped and distorted view of supply / demand based price movement. But when contango slows down, the distortion clears a bit. Last August the market was coming off of a depressed VIX (it was in the 10s) and volatility crept back in. On your left notice the wedge in yellow. Also notice the correlation indicators underneath that show backwardation of VIX futures (VIXY, VIXM, VXV) in the gray background (a background that is normally continuous green on that indicator when contango is in play). Now notice that it resolves itself with a higher VIX producing a higher UVXY without contango depressing the price movement. On your right is the orange wedge that UVXY is now in along with the "stripes" in the correlation indicator showing backwardation events we have been seeing. Seems we are near a reawakening of volatility. Click on this link to see that it is right on schedule.
CBOE:UVXY
by codypd
Using Contango / Backwardation channels to predict UVXY pricesUVXY contango is fairly reliable except when sustained high VIX numbers are posting, The ratio of UVXY to VIX reveals contango / backwardation channels that are predictive to the degree that any trend channel is. This is very helpful as a ratio to forcast UVXY relative to the VIX. Pictured is the current channel with an elipses and "price" tags at the upcoming April 17 close. Heiken Ashi used to more clearly spot significant contango / backwardation pivots. Note that the underlying for UVXY is VXX futures, so the contango / backwardation well known to VXX gets compounded with UVXY.
CBOE:UVXYShort
by codypd
9
UVXY trading predictionBased on the way the UVXY has been trading as of late, it looks like it will maintain this current range (lime green lines) for a little longer. One more move up between $35-36 then it will meet the top of the current trend (green line) as it crosses the longer term downtrend that has held since 10/16/2013 (red line). I really don't think the red line will be broken. Last time this line was hit, it dropped fast (which just so happen to be 10/16/2014, just a year after this downtrend line became the top. I would short at the red line and buy to cover around 26.50. I would short again around 32.50 at the red line again and hold for the BIG drop. 65+% return... IMO.
CBOE:UVXYShort
by Charting
1
VIX index still poised for oversized move higher this summer.Despite briefly dipping below 12, based on this chart interpretation the VIX is still poised for a rather large spike this summer. First trigger would be a move over ~14 then a push through major resistance ~19.50 - 20 would probably see a rapid ramp towards the low 30's. This would roughly correlate to a 20-30% correction in the SPX. Watch to see if the VIX can break and close above the 50 sma (currently 14.08) and then the 250 sma (currently 19.35) for confirmation.
CBOE:VIXLong
by MaxxPayme
1