SPY_VIX_TRADER

SPY_VIX_TRADER

This one is going against all media and current consensus. Most people are calling for capitulation now that yields are at current highs and the recent dot plot signaled a more hawkish stance going into 2024. Let's look at what the chart is saying... We have an almost textbook Wyckoff accumulation phase taking place (outlined by the orange line). A 2-month H/S...

SPY_VIX_TRADER

As previously discussed, spy has not broken (correctly) to the downside of the distribution pattern discussed in last week's post. My leading indicators (gold, EM, and rates are signaling risk-off). However, gold has paused. SPY is at the large 400 handle. I expect a slight bounce or some consolidation to occur before continuing toward my target of ~380.

SPY_VIX_TRADER

I have not posted in a while. My goal is to post weekly updates. I incorporate several indicators for my market sentiment model, including interest rates, EM capital flows, and gold. All indicators are based on academic papers, most notably several by Wouter Keller. Sentiment Model Indicators: Interest Rates: Flipped defensive today EM: Defensive since Feb...

SPY_VIX_TRADER

SPY has had a significant rally on a lower dollar and CPI print. We are now approaching the long-term resistance trendline and the 200D SMA. We also have a rising wedge about to complete a 5-wave move. Supporting the move lower, we have the number of stocks above their 200D SMA at the high of the year, and the VIX is approaching the year's low. From a macro...

SPY_VIX_TRADER

XLY has rallied to and thru previous support on decreasing volume. It is currently oversold and retesting the previous swing high. The main holdings in XLY are: - Amazon -Tesla (these two make up over 35%) -Home Depot -Nike -McDonald's -Lowes -Starbucks -Target -Booking -TJX Consumer disposable income is hovering around the Jan 2020 lows (fred.stlouisfed.org...

SPY_VIX_TRADER Updated 

Food for thought! A brief history of the Wycoff Distribution via stockcharts.com: PS—preliminary support, where substantial buying begins to provide pronounced support after a prolonged down-move. Volume increases and price spread widens, signaling that the down-move may be approaching its end. SC—selling climax, the point at which widening spread and selling...

SPY_VIX_TRADER

Time will tell as this plays out, but now it is also looking similar to 2008. We all know how that ended...

SPY_VIX_TRADER

Recap: The SPY/VIX bounce played out as we expected on somewhat lower volume. SPY touched the downward trendline, after a false channel break. The VIX also bounced nicely after reaching the lower channel limit. This bounce was not based on any material changes - No major Russia/Ukrain update. No additional Fed guidance. No major other news. This bounce is mostly...

SPY_VIX_TRADER

It was a wild start to another week of trading. Yesterday SPY was down close to 3%. Let's look at the rest of this week and into next week: News: - Commodities are going parabolic - Ukraine/Russia are creating geopolitical instability which has spilled over into monetary instability - Today the USA should release news regarding the import of Russian oil -...