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VIXY

Dead Cat Bounce - I am 100% VIX and did not TP on friday (!)Hi folks! See my linked posts for more information regarding the macro state - I am just mentioning the arguments in bulletts it here: - The Chinese property crisis in getting worse by the minute - although mainstream media does not care. - Margin Debt in U.S. accounts is almost 1 Trillion (apx. 4% of GDP !!!!) - Real income down over 2% so far in 2021 due to inflation - Index bubble (indexes are much more expensive than they should compared to market in general) - Central Banks are and/or plans to strap liquidity faster than expected. - Stock prices assume large GDP-growth in perpetuity, which is impossible with falling real income (70% of GDP comes from retail purchases) - Terrible technicals (for those that care - and in a frothy market it seems that a lot of market actors do, so it actually has at least some slight predictive power). = > Everyone needs to spend a bigger portion of their income on living, and thus have to sell stock and/or unwind leverage. In addition, all are in the same boat since everyone are deep in the green, so it is very easy to sell if the movie stops - implying that massive trampling is very likely. Do not bet that you are able to be the first one out because you think you are smarter than everyone - that is what everyone is doing right now, and only a very chosen few will get out in time. DYOR. NFA. Never take the word of others as a given, and never take advise from someone without skin in the game. For the record, I am 100% in VIX futures now, and I did not take profits on friday! (I do not recommend buying VIX contracts now - they should have been bought in the 15-16 range imo.). I wish you all well :)
AMEX:SPY
by TheDots
4
Sell/Hedge SPY imo. - I am buying more VIX (see mye last posts).Hi folks! Please see my linked post for a much more thorough argumentation for my positions - both technical and (the much more important) fundamental ones. An update on the current since my last post: - SPY still snuggling on the resistance that is the broken trendline from march/april 2020. - The Fear and Greed index just turned "extremely bullish" -historically a great contrarian sell signal - The Money Flow Indicator - also an important fundamental indicator historically - is flashing a sell signal (i.e. net outflows of money from the market). A few other points: - The situation in china seems to be deteriorating (2/3 of Chinas top prop developers has crossed a least one of the "Three red lines" and hence cannot take on more debt. - No one is yet to obtain more information on the Tether "Commercial Paper" and "Affiliate loans" - a very bad, as the loans are obviously not given to serious parties (as these parties would have stated it otherwise, or it should at least be easy to find information about them). - Fed meeting today - the market expects tapering, but they might surprise on the pace and/or rate hike schedule. As mentioned, see my linked post for the other arguments. I bought even more VIX futures today, currently holding 90% of my portfolio in volatility related contract. This is absolutely not financial advise - this is just the position taken by a trader who see no better risk/reward anywhere else atm. DYOR. NFA. Never take the word of others as a given, and never take advise from someone without skin in the game. I wish you all well.
AMEX:SPYShort
by TheDots
New Sell Signal - Time to Hedge/Exit Longs/Buy volatility imo.Hi folks! See my Previous post for more information - in short, I believe it is really about time to start hedging long exposure to the broad U.S. Stock market. T.A. Arguments: - SPY tested both the massive broken trend line from march 2020 yesterday and got rejected. - This Coincided with a rejection off the upper 1D Bollinger Bands. - The insane long term RSI divergence is still valid. - Trading volume very correlated with the VIX - i.e. higher volume on high-fear (and usually mostly red) days. - VIX has turned up from right below 15 despite new intraday ATH every day. Green VIX on green SPY-days are not a good sign. - (Not shown on chart) money Flow ETF also show a massive divergence, meaning that one USD increase in S&P500 value corresponds to less money invested (more investors are holding the same hand). - (Now shown on chart) Fear and Greed Index - generally a decent contrarian indicator - is about to turn "Extremely Bullish" yet again. - SPY/M2SL is now above its level on February 2020 - a level only seen at that time and at the peak of the DotCom bubble. Other arguments: - Liquidity crunch from tapering in the U.S., rate hikes from almost every central bank (yes, people from all over the world has contributed to this bubble - not only those directly affected by the U.S. Fed), Potentially forced downturn (debt regulation) due to inflation and default risks. - Potential collapse of the Chinese Property sector and its stakeholders - it seems very odd if this is priced at these levels. - Potential Tether collapse (yes, you heard me right): If most of its 70 Billion USD reserves are (as rumours has it) actually in risky EM (including chinese Property) commercial paper, it is a massive risk for the crypto industry and all the liquidity currently placed there - such an event will be contagious with a high probability. As I am just a greedy trader, I also want to take advantage of this environment, so I have loaded up on VIX futures (see orange graph). My opinion is that volatility (and hedging in general) is extremely cheap at the moment with respect to the current market state. However, this is a risky move (might even be riskier than holding the SPY), so I do not recommend (or is in any way authorised to recommend) such a move - I just state that I am doing so myself, as you should never lister to someone without skin in the game. I wish you all well :) DYOR. NFA. Neve take the words of others as a given!
AMEX:SPYShort
by TheDots
6
Time to sell SPY/Buy VIX imo.Hi folks! If you believe that technical analysis has any prediction power at all (I highly doubt that it has in any other environment than highly speculative ones due to self-fulfilling prophecy) and you are net long the S&P500, then you might want to rethink. - Very soon (possibly) testing broken trendline from march 2020 - Massive divergence on volume since trend broke (Volume follows VIX - not a good sign!) - Massive divergence on RSI - VIX at very low levels In addition to this, the money flow indicator - usually a sound fundamental indicator - shows a serious divergence. Add that to the macroeconomic picture and the pricing (much more important than the other factors I just stated), and it would be a rather compelling case for selling the broad U.S. stock market. I got rid of my last long exposure to U.S. stocks now and loaded up on VIX futures (VIXY) throughout this week - currently holding 85% (!) of my portfolio in such contracts- DYOR. NFA. I wish you all well! :) Never take the word of others as a given - and never take advise from someone without skin in the game.
AMEX:SPYShort
by TheDots
2
No skinny dipping yetHi folks! First - as I like to update on my positions (because you should never trust anyone who do not put their money where their mouth is - and Tradingview should definitely have a "Proof of Position"-feature: I got liquidated on one of my shorts (46.3k, SL 52k, TP 30k) - equivalent to a 0.9% loss of my total free equity portfolio. I still hold the (49.5k, SL 56k, TP 30k) short and added an even larger (52.5k, SL 56k, TP 30k) short. I am currently short BTCUSD for about 2.5% of my free equity portfolio. In my opinion, we are in a massive financial bubble that will eventually burst - even from a Black Swan or (most likely) due to (possibly some combination of) very highly probable factors such as liquidity decrease and less complacency. This has - as you mave have seen from my ideas for the past couple of months - convinced me that the best thing you can to is to sit it out, bet on volatility and possibly enter some short positions is a possibility arises, although with a proper risk management strategy (see the Kelly Criterion). Now, as I have stated multiple times, I am mostly trading VIX futures these days in the since that I buy big amounts of short term future contracts (you can do this through ETFs such as VIXY/VXX etc for simplicity, but you should definitely understand the math before you jump into this - which holds for all investments). However, the grim technicals in BTCUSD - especially the volume divergence - has made me enter short positions for the last month. After the fact, you may say I was too early or placed a too tight SL on my first short, but this is a probabilistic game and you lose sometimes - also, the tight SL is often a bad idea in crypto markets unless you are a scalp trader. Also, if you have the opportunity to enter volatility contracts for a good price (not binance vol options!), that might be better than shorting. Now, I have marked concurrent divergences in RSI and MACD on the daily as buy (long)/sell (short) signals with a price range until the next opposite indicator. As you can see, this simple indicator has yielded massive gains at all signals this year (given that you held the entire position until an opposite signal appeared, which is not recommended due to the change in expected value, and also required you to hold a loose SL at some occasions). This indicator - especially coupled with a volume divergence (which is arguably the most important) - hold up very good historically in both directions. Just check for yourself if you do not believe me. We also saw a first rejection off the what was the support line of the broken ascending wedge today, and the singal is confirmed on up until 4h - if this continues to hold throuhgout the dayly candle, it is another important indicator that supports the sell signal based on the stated triple DIV. For the record, I am a huge believer in blockchain technology, and I also own some staked DOT and ETH. I also plan to place the potential profit of my shorts and/or volatility bets in crypto (in addition to real assets) if I am right - I just think this is a terrible risk/reward environment where the expected value is higher on the short side than the long side in both the U.S. stock market, bond markets and crypto. DYOR. NFA. Never take the words of others as a given, and never take advise from one some without skin in the game. I wish you all well :)
BITSTAMP:BTCUSDShort
by TheDots
Still holding on to my shortsHi folks! For what its Worth, I am still bearish - mostly because of the state of all financial markets, but also a clear bearish technical picture which we have seen since the end of july. I am still holding my shorts with TP 30k from 46.3k/49.5k with SL 52k/56k. For the record, I have also stacked up 40% of my portfolio with long VIX contracts for september and october. DYOR. NFA. Never take the word of others as a given, and never take advise from someone without skin in the Game. I wish you all well.
Short
by TheDots
How to Profitably Trade the DXY vs. Gold CorrelationThe Chicago Board Options Exchange developed the VIX in 1990 to predict future stock market volatility. The VIX is a real-time indicator that represents market participants' volatility predictions for the following 30 days. When the S&P500 falls, the index rises when it rises, demand for protection falls. The VIX is a gauge of market emotion, thus the name "fear barometer" In negative stock market conditions, the VIX increases, whereas in bullish stock market environments, it decreases or stays constant. This is because of the stock market's long-term bullish tilt and high demand for options. The VIX was created in 1990 by the Chicago Board Options Exchange ( CBOE ) to serve as a benchmark for forecasting future stock market volatility. It is a live indicator that reflects market participants' volatility forecasts for the next 30 days. At the most basic level, they constructed the VIX index utilizing weekly and traditional SPX index options, as well as their implied volatility levels. Based on market participants' conduct in the options market, we may conceive of implied volatility as anticipated volatility. Understanding why the VIX swings in the opposite direction of the S&P500 is critical since the volatility index acts as a barometer of market emotion, thus the nickname "fear barometer." What's the big deal about it? The S&P500 VIX rises in bearish stock market circumstances, whereas it falls or remains constant in bullish stock market conditions. This is due to the stock market's long-term bullish bias and the fact that the VIX is calculated using implied volatility. Implied volatility increases when there is a strong demand for options, which typically happens during SPX price declines as market participants (who are collectively bullish) rush to buy portfolio protection (put options). When the S&P500 climbs, so does demand for protection, and the VIX declines. This tendency is likely to have accelerated in recent years, as the VIX has evolved from a market gauge of volatility to a tradable asset class of product offerings on various futures, stock, and options markets. The connection between the S&P500 and the VIX is simply referred to as the S&P500 VIX correlation. In the graph above, I can detect a substantial negative relationship between the stock market and the VIX. The indicator increases when the stock market declines. Since the VIX's introduction in 1990, the correlation between daily variations in the S&P500 and the VIX has been -77 percent. Over the past 10 years, the negative connection has become even greater, currently stands at -81 percent, up from -74 percent prior to October 2008. The tighter relationship may be due to the many products created over the past 10-15 years that allow market participants to trade the VIX. Since previously stated, this explains why we see larger increases in the VIX when the market falls, as VIX trading produces exaggerated changes in implied volatility. The VIX was created in 1990 by the Chicago Board Options Exchange ( CBOE ) to serve as a benchmark for forecasting future stock market volatility. It is a live indicator that reflects market participants' volatility forecasts for the next 30 days. At the most basic level, they constructed the VIX index utilizing weekly and traditional SPX index options, as well as their implied volatility levels. Based on market participants' conduct in the options market, we may conceive of implied volatility as anticipated volatility. Understanding why the VIX swings in the opposite direction of the S&P500 is critical since the volatility index acts as a barometer of market emotion, thus the nickname "fear barometer." What's the link between the two? The VIX rises in bearish stock market circumstances, whereas it falls or remains steady in bullish stock market conditions. This is due to the stock market's long-term bullish bias and the fact that the VIX is calculated using implied volatility. Implied volatility increases when there is a strong demand for options, which typically happens during S&P500 price declines as market participants (who are collectively bullish) rush to buy portfolio protection (put options). When the S&P500 climbs, so does demand for protection, and the VIX declines. This tendency is likely to have accelerated in recent years, as the VIX has evolved from a market gauge of volatility to a tradable asset class of product offerings on various futures, stock, and options markets. The correlation between the SPX and the VIX is simply the connection between the SPX and the VIX. In the graph above, I can detect a substantial negative relationship between the stock market and the VIX. The indicator increases when the stock market declines. Since the VIX's debut in 1990, the correlation between daily changes in the SPX and the VIX has been -77 percent. Over the past 10 years, the negative connection has become even greater, currently stands at -81 percent, up from -74 percent prior to October 2008. The tighter relationship may be due to the many products created over the past 10-15 years that allow market participants to trade the VIX. Since previously stated, this explains why we see larger increases in the VIX when the market falls, as VIX trading produces exaggerated changes in implied volatility. The relationship between the S&P 500 and the VIX has been consistent and reliable throughout time. The rolling 1-year correlation between daily changes has averaged about 83 percent over the past 10 years, staying within a relatively tight range of -70 percent to -90 percent. And the VIX has been consistent and reliable throughout time. The rolling 1-year correlation between daily changes has averaged about 83 percent over the past 10 years, staying within a relatively tight range of -70 percent to -90 percent.
SP:SPXLong
by TayFx
2
S&P500 third consecutive triple DIV!Hi folks! This - in addition to almost everything in financial markets ATM - is very scary reading. S&P500 just flashed a third consecutive (i.e. uninterupted by an equivalent buy signal) Triple Divergence (RSI, MACD and Volume) since the covid-correction on the dialy. Usually, one such signal is a bad sign, but three consecutive ones is just madness. Time to hand over the bags and buy volatility, short or just sit ut out completely - just everything else than being long the stock market. For me, I have accumulated VIX futures (VIXY ETF) since the end of june at all times when it dipped under 16 to protect my long holdings. I sold almost all my other holdings late friday after the bounce - its just a terrible risk/reward ATM. DYOR. NFA. Never take the word of others as a given - and never take advise from someone without skin in your game.
SP:SPXShort
by TheDots
Triple DIV on Daily as well - Take profit/shortHi folks! As those of you who have followed my predictions for a while now are aware of, I have a massive bearish bias these days - while my predictions in the last weeks have yet to become a reality, my stated short positions are still alive and well. This is first and foremost due to the extremely scary macroeconomic state (and thus fragility of the financial markets), but also the fact that we have had massive Bearish Divergence on both RSI, MACD and (most importantly) Volume in almost asset classes. Today, the triple DIV played out in BTCUSD on the daily as well, piling on to my bearishness. My position placed today is Short BTCUSD at 49500, SL 56000, TP 30000 - adding to my short from 46300 with SL 52000 and TP 30000. For the record, I also hold over 30% of my portfolio in VIX futures (@VIXY) due to the mentioned macro picture. The reason is a combination of systemic overvaluation in addition to the fact that liquidity is evaporating from the markets (just check trading volume and decrease in margin debt). I would state that shorting is a risky business, and that just taking profits and/or buy volatility contracts might be a preferable option here. I would never recommend shorting to anyone unless one feels extremely confident in the probability distribution and you know how to manage risks - I just state my position to let you know that I put my money where my mouth is. DYOR. NFA. Never take the word of others as a given - and never take advise from someone who has no skin in the game. I wish you all well.
BITSTAMP:BTCUSDShort
by TheDots
12
The case for VIX right now - Margin Debt down 4.3%Hi folks! As you may know, FINRA published the Margin Debt Statistics for July the other day. As you may also know, tops in prolonged and explosive runs in margin debt usually precede big corrections/crashes in the S&P500 by a couple of months The Margin Debt reading was down 4.3% from July after 15 consecutive months of increase (!) Here is my idea on how to play the situation: The VIX (CBOE Implied volatility from Option premiums on S&P500 for the next 30 days) is currently sitting at a measly 17.12 (albeit after a massive surge from a steal of 15.22 last week) - below its historical average of 19.52. Now, since the margin debt very likely topped out in July and the market tends to follow suit a few months later (in addition to just about every thing else - monetary policy, delta, debt ceiling, labor exodus, inflation etc.), it is reasonable to assume that the probability distribution is heavily skewed to the downside for the time to come. Being able to buy the VIX - which is an estimate of future volatility - below its average at such a state seems worth considering. Based on this idea, I took the liberty to create a chart marking the following - in addition to S&P500 and VIX from 1999: (1) Tops in margin debt (Black verticals) (2) Bottoms in VIX before crashes (Cyan verticals) (3) Sell signals based on concurrent bearish DIV in RSI+MACD (Red verticals) (4) Beginning of market crashes (red cross) (5) Current VIX level (orange vertical) As we can see, the S&P500 do usually take a big tumble a couple of months after tops in margin debt. More interestingly is the VIX bottoms, however - the VIX usually also bottom out some time before markets crash (this makes perfect sense, as bottoms represent states of the market where very few expect volatility). Thus, although it is hard to time the markets, this might be one of the very few really good Risk adjusted bets you can find right now. My strategy since the end of June has been to just sell a little bit of my stock portfolio every week to buy some VIX, and then sell some VIX contracts during periods of small volatility spikes to cope with the future premiums over time. I bought a massive position on Friday and another one today due to the Margin Debt reading. I will continue to buy as long as complacency dominates the market. On another note, I always use historical data to weight my bets according to the Kelly Criterion (ex: www.frontiersin.org) The simplest way to trade the VIX unless you are familiar with derivative platforms is to buy ETFS such as VXX, VIXY, VOOL.DE etc* Disclaimer: This is not financial advice. I urge everyone to always do their own research, and never take the word of other for granted. In addition, never take advise from someone who has nothing to lose from giving it to you nor follow the advise themselves - that is why I disclose my positions. I wish you all well! Good luck :)
SP:SPXLong
by TheDots
Technical analysis update: VIX (11th August 2021)Upbeat economic data and further progress in economic recovery will lead to decrease in the market volatility over time. Because of that we would like to set our short term price target for VIX to 15 USD. Disclaimer: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as basis for taking any trade action by individual investor. Your own due dilligence is highly advised before entering trade.
TVC:VIXShort
by Tradersweekly
4
Volatility - VIX Wyckoff AccumulationIdea for VIX: - VIX finally has touched pre-COVID levels. The debt and margin fueled recovery is complete. - Markets hitting ATH's every day (nearly a record for days in a row). - Yet every warning is flashing, market components are down, yet indices grind up on low volume. - Liquidity is flowing out, tapering has already begun, global credit impulse is negative, and market breadth is collapsing. - We are in the greatest asset bubble in history, and underlying conditions point to the greatest crash in history. - The crash has been telegraphed. In hindsight, it will be unanimously agreed upon that it was obvious. They will wonder how anyone could have been bullish here. - Such is the nature of the rally that a significant drop would create a bid-less market and mass liquidations. - Operators like to bid up a market to sell into (creating blow-off tops), and vice versa, to shake out retail and make sure the market will absorb their entire order. It is all being set up for a great flush. Classic accumulation pattern. Bubbles make their greatest gains at their end. Speculate the trigger by mid July. "Be fearful when others are greedy" - Warren Buffett GLHF - DPT
TVC:VIXLong
by UnknownUnicorn1043646
Volatility - Nothing New Under The SunIdea for Volatility: - Wyckoff Cycle Mapped. - Wave Frequencies synced. - Cause and Effect determined. - Greater Cycle: - Bonds Volatility looks ready: - China Credit Impulse turns negative, consequently the global credit impulse turns negative. - Liquidity Flow: Credit > Bonds/Currencies > Commodities > Stocks. Fighting the Fed: - Reading the Curve: - Data Suppression: - Volatility Suppression: - DXY is in a rising Trend: - Decision point for the Dollar: - Dollar is goosed, but Yen seems to be telling, as the Yen is seen as a haven currency and AUD is correlated to inflation: - Yuan is very telling for the global economy: - Bond yields (CN & US) are telling: - Forecast suggests a Volatility spike this summer. - It is likely that a greater explosion in Volatility will follow... speculating the date to be September Quad Witching 2022 (September 16, 2022). It's Black Swan season... Look out for them, but they are never the cause. It is all about the Credit Cycle. GLHF - DPT
TVC:VIXLong
by UnknownUnicorn1043646
VOLATILITY B WAVENew all-time highs in the market combined with a creeping VIX are cause for some alarm. Inflation hedges/bets seems to be the talk of late with inflation on the rise.. and this is not unwise considering that money supply is off the chart and velocity is sure to pick up... although velocity is not a necessary component of inflation. Remember that the market is forward looking and when something becomes obvious to you, you are are usually late to that fact. I believe volatility is bottoming in this range and is very likely to start the B wave of a larger wedge. I had expected this to begin sooner. If this is indeed a new, larger wedge, then perhaps it's even bigger than I anticipated. I also believe the market is quite a ways off from any major crash like we had in March of 2020...perhaps years out. But that does not mean we will not have sharp drops with periods of volatility.. I tend to think we are nearing that now. Be on the lookout for market noise and flush-outs. There are likely to be some decent buying opportunities made available in many stocks soon. Hold fast.
TVC:VIXLong
by gghsusa
4