SPX500 - bears still in controlThe failed to hold the channel trendline, so it's looking bad for bulls. A quick update on what I'm seeing with the structure on SPX, SPY and the VIX.
VIX trade ideas
VIX still have room to goVIX hitting resistance around 34 but still pretty bullish and have another 9-10% room to grow targeting 37.
MAs are all in line. Overall still bullish
VIX Volatility only beginningVIX is showing higher lows and has broken above the Brim Level of a Cup and Handle.
This is problematic for a trader as it means a lot more jumpiness is coming.
It's also broken out of its downtrend on both chart and the RSI.
With the inflation rate going up, interest rates soon to go up in November and with more money going to be printed in the economy - this isn't good for the markets in the medium term.
Time to risk less per trade, I'd imagine.
MARKET THOUGHTS 10/14/22Grab a cup of coffee, wake up and read up lol
** (Not a Financial Advice, just sharing my own opinion and the process I do in the morning before I make a decision to trade.) **
As you guys are all aware the SPY went nuts yesterday, anything is possible in the market these days lol. Once the shorts got squeezed above 354 and FOMO kicked in it ran like it stole something :rofl: .
Now as you get ready for todays play here are things you should consider based on the charts and technical analysis:
- SPY, yesterday, just showed a possible sign of short term reversal from the divergence we've been talking about in the stream the whole week.
- The bounce was larger than expected and larger than usual, when a move like this happens one direction, there's a possible consolidation day the next day or pullback, unless volume continues and breaks above key levels continuing to squeeze the shorts and FOMO continues as well.
- If you are planning to go Gungho on going long, zoom out first and see the trendline on the daily and the pre-market action on SPY and where its at currently (See Chart Posted).
- Break of that trendline upwards can mean retest of the next resistance and probably even retest the next trendline up, but SPY has done its weekly range as of yesterdays candle, so slight chance it will continue breaking to the upside and do another big run. If anything, possible pump then pullback.
- The VIX on the weekly hit that trendline we talked about on the streams this week too causing the downward direction which usually does the opposite of the market, hence the run up yesterday.
** Scenario 1 ** VIX bounces above 9ema on the daily and stays above, market pullback.
** Scenario 2 ** VIX breaks below the 9ema on the daily, it will have about 1-2points max move today. Which can mean a pump in the market and will hit exhaustion, so pump and dump. (See VIX Chart Posted).
SPY
VIX
Long Volatility into AugustBy now you all know the drill. Let's start with an initial framework, assess the current environment, and evaluate all below questions.
are we trending or ranging?
- a series of higher highs, higher lows
- sellers structure is broken, we are tracking whether buyers will protect or find it difficult to hold
discount?
- we are tracking the lows for the previous wave block
- Support 20, Pivot 25, Resistance 38
managing trade?
- Trading and assess based on quarters, 00, 25, 50, 75
- Market participation in form of current strength/weakness, when market is weak we are sellers and when strong we are buyers
This position, technically speaking, is very similar to the swing we traded in 2020. Buyers have developed a structure of higher highs, and higher lows, and desire their chance to go over to a direct attack on the highs.
In this case the result is not certain; but since attacking in this fashion is characteristic of a volatility event. There are two lines, assuming the 20 support holds. In the first case, as well we need to track 25, the combinatory breakout of 25 will allow buyers to continue their summer dance with a romantic hue, unlocking 38 for August.
VIX reached target, now correctionIt looks like VIX isn't yet ready to break entirely - Double top with the second one being curvy (lack of power) - Expecting this relief to play out now.
VIX Rejects AgainVIX has had yet another rejection off the key level. This resulted in strong short covering in stocks just as retail traders all agreed that the market could never go up again and could only go down.
VIX 2 moon.I think we may now, finally, be in the cusp of the real volatility breakout.
Something that will later be referred to as a Black Swan in the indices and the VIX making its big move.
Look out for the headline, there'll probably be one.
VIX is down all day!Should of been super green from the open.
Should of pay attention to it in am, would of save me from some stops
31.50 is the support
This will blow, still coiling
$VIX CPI GAP DOESNT MOVE THE VIX?Today SPY and SPX gap down with little to no reaction in the VIX. Does this mean we have more pain to come??
VIX is in C&H patternThis is getting so close for a breakout and big market sell!
There is also smaller C&H if it hits 31 level.
Regardless of a scenario, we are very close to some real move.
I was expecting this move and wanted to see a year low hit end of Oct into early Nov.
It seems its going to play out well.
Question is only one - how low?
Is $VIX about to break out to 50? (bottom coming?)After being in a "range" of sorts for the past year or so, is the VIX about to break out to 50 and above?
If this proves to be correct, due to some unforeseen event, then arguably one can say that a bottom is near.
However, if we grind in this range, making lower lows and lower highs, then we can grind down to lower levels for... well, for quite a while, imo.
VIX is in breakout terretoryCareful here, this can explode at any time imo.
Ideally we see a quick trip below 30, but it doesnt have too.
Lets see if we can get that move down into CPI, so far its not as promising
VIX could have a turning point soonVix is bouncing in what looks to be a bullish pennant.
I think VIX is going to test the previous high at 34.85-35ish In theory this should create a double top.
Pennants can easily be bullish or bearish though depending on market sentiment and momentum really so there is a chance it breaks to the down side.
If the pennant turns out to be bearish there's a possibility it follows a harmonic pattern and then breaks out and goes back to around 37
VIX suggests stock market capitulation is yet to happen- stocks have been in a decline for almost a year now (see past analyses where this has correctly been predicted)
- despite that VIX, a measure of stock market´s historical volatility, has barely moved
- this is in stark contrast to Q1 2020 when it experienced a massive surge
- with volatility on VIX very low that implies a sharp move of (likely) similar magnitude is yet to happen
- an upside move in VIX should result in increased stock volatility
- increased volatility in stocks more often than not results in downside price expansion
Not a time to be a hero. Protect your capital at all costs.
VIX Testing Key Resistance AgainVIX is testing the key resistance yet again. The weekly stochastic near 80 is very high and usually signals a rally in stocks is not far away at least in the short term. The VIX call buyers are nowhere to be seen so this also confirms that the VIX is over extended. See if we get yet another rejection off the key level. Retail stock traders have rarely been so bearish, this is almost certainly pointing to a short covering rally in coming days.
$VIX Well above the 5DMA and holding MTD VWAP I think we see a VIX breakout in the coming days, looking for a 34 test and 40 peak
Edge of a Precipice Will we ever see VIX at 16 again?
Here I explain the mean reverting nature of VIX.
Then I predicted exactly were VIX and JHEQX would be on Friday, October 7th.
Now we're sitting at the edge of a precipice of the worst financial disaster in history.
So I wrote an indicator to give us retail traders an inside eye so maybe we could catch a long vol opportunity of a lifetime.
If you understand how a large institution positions assets and how they hedge against a market correction you can a) find these hedges and b) use dealer positioning to predict it.
That brings us back to VIX.
Vix is calculated using SPX Weekly options rather than stocks.
If Vix sustains higher levels for longer it is telling us liquidity is bad.
As more institutional players position to the downside eventually there will be too much money on the same side of the boat and the boat will flip.
Think of market participants as people on a boat and the waves are volatility.
As the seas get more violent (swings up and down in market price) people on the boat are going to try to find a position best suited for the volatility.
Ask yourself now, is buying puts a good way to hedge downside?
No.
Fixed strike implied volatility is a disaster.
It has been collapsing for nearly the entire year.
Institutions protecting assets (like British pension fund managers apparently) with puts are getting worse and worse returns hedging with puts.
You may be able to pick off edge as an active trader by buying well timed Puts and cashing in on premium kick for a quick 100% return, but these fund managers holding puts are getting destroyed.
Instead, institutions are piling into selling puts while shorting stocks.
We all know what happens when too many shorts pile in, they frequently get squeezed.
I was expecting short squeezes to take hold when Oil started climbing.
Because the alternative is JHEQX leaning negative into an already crowded short side and a VIX > 32.
And that is exactly what nearly happened on Friday.
If futures drop overnight or price drops below 3580 JHEQX will start selling and the only thing stopping a drop to 3200 will be the FED with its left tail tucked between their legs with some fresh QE.
As a great philosopher once said.
"Dread it. Run from it. Destiny arrives all the same. And now it's here"
VIX - Stocks Sentiment in preparation... for the ultimate drop. So we have broken the top curve - that is bad as hell already in itself. Additionally we retested it and have been trapped since then between the top descending trendline and the curve.
What I expect to happen next is for VIX to consolidate ( or break to the upside and retest the trendline ) until EOY. Check my US100 idea to see what stocks predict in the meantime.
As a reminder - VIX has never shown such sentiment "moves" as we have nowadays - but just once in the past - And that one time has been replayed perfectly so far - that's one of the reasons why I expect VIX to consolidate or even show slight signs of minor-relief for stocks until Christmas season.
Cheers!
VIX in ending triangle and coilingAnother interesting setup here
Which way it will breakout?
My bet is up...
vix shortvix setup.. short..
i want tell you something about information, whatever you see any information in chart , you may get wrrong becuse we are retail traders have limited infomation , its important find inside information, its ultimate advantage, its real edge. you really want trade with institution!
