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XIV

CAUTION: VXX Is Broken!The pricing of the VIX futures tracking ETN VXX no longer reflects reality. Barclays has halted new issuance of both the VXX and OIL ETNs. Existing shares of VXX are being bid up far beyond the movement in the underlying futures market. As I mentioned in a previous post, (linked below), I believe the VIX is setting up for a breakout to the upside. I strongly caution against trying to trade VXX right now. For one, trading has been halted repeatedly, which may happen again, and you NEVER want to get stuck in a position that you can't trade out of. For another, VXX pricing is no longer tracking the VIX futures, so it's impossible to predict how VXX will respond to a significant move in the VIX futures. When the price action in a market is irrational, technical levels become irrelevant, fundamentals become irrelevant, and you can't expect logical price movements from the market. For example: See the recent price action in crude oil futures (CL1!). One of the most valuable skills in trading is recognizing when not to trade. VXX right now is like a crate of 100 year old dynamite sweating nitroglycerine in the desert heat. DON'T TOUCH IT! Stay safe out there traders!
CBOE:VXX
by iamroot
1
VIX ETPs, The Ticking Time Bomb That Could Unleash VolatilityThese fairly new ETPs, such as UVXY, VXX, SVXY, etc. will likely lead to volatility buying in which we've never seen before. People will be using these ETFs to hedge the risk of a larger stock market correction happening, leading to a continuation of the exponential increase in volume that these products have seen since their inception. This exponential increase in volume will lead to these ETFs holding the majority of VIX short-term futures. When these funds are forced to rebalance blindly to follow their prospectus, it will lead to them placing orders at settlement for a number of VIX contracts that may be higher than the daily volume of contracts traded that day. This will lead to massive slippage in the futures market, causing incredible price swings in both directions. Because these ETPs are forced to buy when price of VIX futures goes up, and sell when the price of VIX futures goes down, to maintain a balanced portfolio of 2x, 1x, or -1x respectively. It will lead to a positive AND negative feedback loop as these funds buy or sell futures based on their NAV readjusting and push the price of futures up or down because of lack of liquidity, which makes their NAV readjust higher or lower, which forces the funds to buy or sell more futures, which pushes the price of futures up or down, which pushes their NAV up or down, which forces the funds to buy or sell more futures etc. Once the liquidity risk of the long volatility ETPs becomes extremely significant, like we have just recently saw with the short volatility products (XIV, SVXY, etc.), then the liquidity in the futures market will not be able to support these products and it will cause massive and insane slippage like we've never seen before. These products did not exist during the last recession, and nobody is really sure how they will act in a real recession like 2008, especially now that their volume is exponentially higher than it was at inception, and could likely continue that trend of increasing for quite sometime, especially if a larger stock market correction occurs, and more investors look to these long volatility products to hedge their risk or make a profit while almost everything else is red. Many are claiming that because some of these ETPs had been shorting volatility on this run up, they had been helping to suppress volatility, which helped to boost the stock market. Now many are quick to blame these products for being the "cause" of the crash this week by increasing volatility. I think that the real truth here is that they did help suppress volatility on the way up, because they sell volatility when volatility goes down, and we've had the lowest volatility in the US since 1964, and as volatility increases, whether it happens now or in the future, these ETPs will help volatility to be unleashed like we've never seen before, because they will buying volatility en masse as volatility increases. These ETPs are not the only cause of volatility, but they will likely be a major factor in helping to create more massive price swings in the VIX than we've ever seen before, which will either unleash or suppress volatility, depending on which way the trend is going. The most important part is that the long volatility ETPs such as UVXY and VXX, could experience an "acceleration event" like XIV did, but because they are long VIX instead of short, like XIV, this could lead to a massive increase in the NAV of these Long VIX ETPs, potentially overnight, as these Long VIX ETPs become larger and the liquidity risk in the VIX futures market becomes far more significant. While it's not quite clear that these ETPs have reached critical mass, they will likely continue to increase in volume very quickly, particularly if this stock market correction becomes larger and more investors look to VIX ETPs as a way to hedge their risk or make a quick profit. This means there is a ticking time bomb in the volatility market waiting to explode.
CBOE:UVXYLong
by Intuit
8
KEEPING IT COOL!!! VIX SWING TRADE OPPORTUNITY (6 WEEK HORIZON)Pure technically we have seen the weekly VIX candle breach the Bollinger Band 6 times in the last 11 years with a syringe like pattern (more than 70% upside). In my opinion this pattern happens when people are in panic mode. 5 out of 6 times VIX dropped significantly within 6 weeks. The exception (rectangle shape) is the 2008 crisis. My SL will be set at the top of the syringe 62.37 (approx -25%). With a Risk/reward 1:2 my TP is 23.76 (approx +50%). IMPORTANT NOTE: PAST REWARDS DO NOT ALWAYS REFLECT THE FUTURE and because this may be more like a 2008 style pattern. DO NOT INVEST more than 20% of your free cash and be ready for a martingale ( set an alert and double down in the next huge spike)
CBOE:VIXShort
by nikvo1990
2
SP500 My perspective -start to presentI did this once before last year but I thought it is good once again to repost how I see the market, since inception in the early 1900's to today. From my perspective, we are nearing the completion of a supercycle 5th wave. And as you can see from the chart (which trading view does not go back to the beginning...see a historical chart if you want), supercycle wave 1 peaked just before the start of the 1929 crash and the great depression. Since then we have essentially been in a bull market with the exception of the 2000's which clearly appears to resemble a wave 4 correction. As you can see, what has been occurring since February isn't even noticeable. Next we will zoom in a little more to the weekly. Although it appears cluttered...try to bear with me as I am not about to clean it up more just to satisfy your eyes. Every once in a while I try to take a look at what I had going on and see if anything that I have learned over the last year or so may have changed my perspective. And the answer is yes....slightly. SO I will explain. Moving right along. Take a look at the start of the supercycle 5th wave which began at the 2009 bottom. I believe this is a more accurate count. The blue wave 2 only has a little more than a .382% retracement. So that would mean that the 4th wave correction (for the blue count) Is going to be over .50% and likely reach the .618% retracement, whenever it tops. As you can see, I do not think we are there quite yet. I am thinking that may not happen until the middle of beginning or middle of 2020. When that does happen, as you can see, it will be severe. Why so severe. Because the higher we go, the more points the percentages equate to. So while the actual points drop may look similar to the 2008 - 2009 dump, the percentage is not as great. So while drawing/updating this chart, the time proportions and Fib price extentions appear to bring us into 2020. (The other reason is that I don't think the powers that be, who are behind the scenes in American and Global politics and world banking....Don't like Trump and they may trigger a market correction to try to knock him out of office. It would have to be scary and start several months before the 2020 election to scare people away from voting for him). But that's just a conspiracy theory. ;) also notice that you can barely make out the correction that started in February of this year. Kind of crazy isn't it. Next I would like to zoom in even more to where I think we are now. I put this sub wave 1 (orange) where I did because when I zoom in to the prior dip, it appears to me to only be wave 4 of 5. Either way, it does not really matter because the fib retracement for wave 2 is very shallow. Which means that the next correction is supposed to be deep (which we are experiencing now). And I do not think we are finished yet. I zoom in even more. As you can see, we haven't even broke the .50% retracement yet. If we stayed in the wedge, then we could break the .50% and that may be my first target. But I would not be surprised that we get a wick that drops into the .618% green box range. Then I think a great long position can be started. For this next part....maybe I am wrong and we have already completed our a,b,c correction and are already starting into the final wave c drop. But that would mean that the 4th wave last a day and that just seemed too short. The reversal in price at the end of the day was interesting and we will see what happens over the next couple days to help tell the story. and now the 5 minute. Good Luck
SP:SPX
by SalN
18
SP 500 "weekly view"SO obviously we are in the supercycle 5th wave. Inside that, we are in the 3rd wave. Inside that 3rd wave we have just completed the smaller degree 4th wave (even thought it felt big) and are about to trek up for that smaller degree 5th and complete the larger 3rd wave. The drop for the larger 4th should be huge and impulsive just like this last drop. I was expecting an impulsive drop because of the wave 2 corrections being long and slow. So the same goes for this next drop. Timing it is not something I wish to really do right now, except that if the larger cycles are still about correct, then it could start with a September rate hike and end towards the end of the year. GL
SP:SPXLong
by SalN
1
A RECOVERY OR A RETRACEMENTEth btc and Neo have now returned to critical areas. They are all at resistance. I believe that all markets are connected to some extent. We saw what happened with US equities over the past few days. Volatility was very low (reflected in VIX ETF ) . Many were profiting from XIV the inverse ETF. When one side of a trade gets too crowded then opportunity presents on the other side. The Dow DJI bounced at a logical place, but now we have increased volatility so we can expect more large moves in the next few days. Sometimes when traders are using margin they are forced to liquidate their other holdings to cover the margin calls. This is how other markets are affected. Gold and Silver did not react. Equities in most of the world dipped and retraced Bonds (10 year note TY ) already retraced from its 30 year long ascending channel. The dollar index already is working out of its downtrend. NEO is up 60%. and other crytpos up by 20 to 40 % I will continue to wait for this volatility to play out. We may have our answer in 2 days.
by a1Keith
1
sp500 a little moreI think I can see it.. Yes this has been very tricky. When I see it bust through then I wait to see what the market wants to show me and adjust. As you can see,....IT APPEARS...LOL....like we are if the final wave 5. Today was a small wave 4 and we should move up in the next day or two. Since the larger wave 1 was the longest, wave 5 cant be longer than wave 3. So there is the FIB measurement for wave 3 and as you can see, there is a nice 2900 number just below the 100% wave 3 measurement. Can this be it finally? I think so. This correction (once it get started) should be a good one. But I really think the first part down could be only 5% for the A wave. Then of course the annoying B wave. And that should take us into March or possibly all the way to April before the much bigger 10 - 15% wave C. Ill try me best to time it based on the B wave back up.
SP:SPX
by SalN
1