VX FakeoutVX tried to breakout earlier but failed and ES held low of day. Choppy action, I expect chop until this range is broken.
VXM1! trade ideas
VX BreakoutVX has broken out above a descending wedge it was forming for a little over a month. There's also a bull flag on the 15m when you zoom in. Here's a path I'd expect to see if VX continues the breakout. The theme for the past year has always been for VX to fail, so we'll see if his time is any different or not. Key level is 14.15, if it breaks above that things could get wild.
VIX - Fear indicator shows concern but not panicTrue market capitulation fear events are marked with semi generational fear levels of the charts
Were at a point of a resistance , but could easily slice through this level if we get increasing levels of uncertainty and panic entering the markets
Could we see 30? Possibly
VX Range Bound VX has some brutal chop today. I don't expect any further break outs or sell offs on ES until this range on VX is broken one way or the other.
VX Short IdeaVX had a big move down after CPI and also has the contract rollover. It's a ways off resistance now, but it'll most likely revisit the area at some point soon, so I'll be watching this to take a long on ES when it gets there.
VX1 (May) - Play long on PPI and CPITrade from 13th May (Mon) - 15th May (Wed)
UX1 has been compressed very low thru out this week (and very quiet) before key eco data next week. Model indicate that there is a Long VIX coming during the eco release. Hence win-lose odd ratio is in favor of long
Entry price reference: 13.55 or lower
UX1 Indicative range: Low - High 13.4 - 15 (spread 0.2 - 0.9)
Stop loss: Wait until PPI release at least, set around 13.1 lowest
Profit take: 15 (or higher if PPI and CPI came slightly hotter than expected)
VX Analysis and Trade IdeasAll of my trade setups will always depend on VX. It had been extremely weak since the market bottomed in April, but it was strong today and that put a lot of pressure on ES. VX rejected at the 13.85 level in had been watching. This is the make or break level for the short term IMO. If it's strong again tomorrow I'll be looking for puts on SPY/QQQ, but if it continues down after rejecting 13.85 I'll trade with a bullish bias.
We have PPI and Powell in the morning along with CPI on Wednesday so monitoring VX will be critical to determine where ES might head next.
Small Account Challenge Day 1 RecapThis is a trade recap from day 1 of my small account options challenge. Aiming for $50k profit with a MIL:1K account. Only made $33 today, but can't complain because of how choppy things were. Happy to have a green day and I'll slowly scale up my size and risk so I can have some bigger winners. Defense is the most important for now.
VX Stair Step DownThis is kind of a messy looking chart, I don't usually like to have this many lines. What I'm trying to illustrate is that VX has been slowly stair stepping down in a pretty controlled manner. I was surprised to see this morning's rally fail with VX doing this, but there is just no momentum or volume this week. Not sure what to make of all of it. The low volume grind up on ES tells me the end is near, but VX is saying to long. Will be interesting to see how it plays out.
Death of VXVX is near all time lows, had a nice rejection today off the 14.05 level which has sparked a rally. I wouldn't want to be shorting SPY or anything else until this gains some more strength. It had been slowly grinding down in a stair stepping manner which usually means it's going to continue.
VX WeaknessThere's a lot of bears out there right now calling for a crash, and I thought we'd have continued downside as well after seeing VX break out of its major downtrend it has been in since 2022. However, in classic fashion VX hard failed within a few days and ES has already recovered a lot of the losses within a few weeks.
VX has continued to weaken since the market bottomed. There will be no sell off unless VX becomes strong again, it's just a fact. I'll need to see VX above 14.45 to consider being bearish now. I expect all rallies on it to be sold until it breaks this downtrend. Zoom out for longer term levels and trends.
This is why the markets will not crash in the near futureFirst things first: This is about the longer-term direction of the market. We're not advising against short positions here. In the short and medium term, they can lead to significant profits. However, given the seemingly fragile nature of the current markets, I'd like to point out the COT (Commitment of Traders) data and the corresponding levels in the Volatility Index (VIX). Here we have a weekly chart. The blue line represents the positions of the Commercials in the VIX. We can see that this line reached significant peaks just before the markets collapsed significantly, by 15% or more. Particularly notable are the extreme levels in November 2019, just weeks before the markets collapsed due to the COVID-19 pandemic. Often, the net long positions of the Commercials rise to these extreme levels, and the decline in stock indices occurs several weeks, sometimes a few months later. What does this mean for the current situation? Looking at the net long positions of the Commercials in the VIX, we can see that we are very, very far from extreme levels that would make a significant downturn likely. Therefore, it remains true: The Trend is Your Friend. And the trend continues to point upwards.
VIX (MARCH) --> Friday overshoot?Trade for 11th March (Mon) - 12th March (Tue)
UX1 went a bit of overshoot with Tech sold off, which also influenced by the weekly Option expiration (rather than Non-farm). However, there is no indication on fear in the market. Our model suggested it will still go compressing till Tuesday (post CPI data)
Entry price reference: 15.2 or higher (this is not at Open)
UX1 Indicative range: Low - High 14.5 - 16 (spread 0.7 - 1)
Stop loss: 15.7 post CPI data release on Tuesday
Profit take: 14.5
VIX (MARCH) --> In defense mode now?Trade for 4th March (Mon) - 5th March (Tue)
With such a hot market in place (still very strong momentum), even though spot vs UX1 has built a big gap on friday and in long run there is no sign of "fear" yet. However the contradict move for UX1 March on Friday indicate a long VIX model signal.
Entry price reference: 14.05 or lower
UX1 Indicative range: Low - High 13.8 - 14.5 (spread 0.95 - 1.01)
Stop loss: 13.8 (30 mins post US open, basically to avoid a big compression)
Profit take: 14.35 (or let it run if VIX surged)
VIX (MARCH) --> Thurs down, Fri expecting to go up againWith PPI data release on Friday (again.. there may be a surprise as like Wednesday CPI). Model is expecting a surge on UX1 (March future).
Entry point: 14.95 or lower (watch for how Market goes on Thursday and Friday APAC/EU morning session)
Profit take: 90bps from Entry or 15.8 (whichever hit). In particular if PPI is much hotter than expected (est. 0.1% on Core PPI), then let it run further till where VVIX has hit the upper bound (use BB 20 EMA, Daily, 1 year window)
Stop loss: 14.7 (about 25bps below entry) post PPI release
VIX (FEB or MARCH) --> still indicating to go upTrade for 12th Feb 2024 - 13th Feb 2024 (Mon and Tues)
With CPI data release on Tuesday, SPX is just slightly above the 5000 threshold (subject to how long it is able to hold) and SPX Monthly Option expiration on Friday. Model is very committed with a long vix signal which led an average lift of 50+ basis pt
Any "bad" CPI data point higher than expected could trigger a negative reaction to the market
Entry price reference: 13.35 and lower (for Feb Future) OR 14.7 and lower (for March Future)
UX1 Indicative range: Low - High 13.1 - 14 (for Feb Future) OR 14.4 - 15.2 (for March Future)
Stop loss: 13.1 for Feb OR 14.4 for March (use 30 mins post US Open)
Profit take: 14 for Feb, 15.2 for March (anytime thru out the day)
VIX Futures Facing Resistance at 200-SMA with Bearish DivergenceVIX Futures are currently sitting at the 200 SMA on the 1-Hour Timeframe at Resistance with Bearish Divergence a looks to be preparing to go down to fill the gap it created on the spot market, likely after the CPI release.
VIX (FEB) - about to go up !??Trade for 8th Feb 2024
As now ES and NQ is on the high end, there is a expectation of a mini pull back at least for profit take.
Entry price reference: 13.40 or lower
UX1 Indicative range: Low - High 13.05 - 14
Stop loss: 13.2 30 mins post US open (tighter stop loss)
Profit take: 13.6 - 13.8 anytime thru out the day
VIX (FEB) - neutralAs now is in this strange pattern where ES up, Vix up, signal continue to keep as Long spread signal, also recent VIX curve move is parallel move in front 3 months (long spread help to keep risk low as no real direction in short or long vix)
Entry price reference: 1.06 or better (UX1 is 14.12)
UX1 Indicative range: Low - High 1.01 - 1.11 (UX1 is 13.8 - 14.4)
Stop loss: not set
Profit take: 1.11
Do prepare a UX1 future pop at end of month (also given FED meeting on Wed)
VIX (FEB) - still looks like there should be a bounce upThis is for Long UX1 (Feb) positioning (1 day),
Entry price reference: 14.6 or better
UX1 Indicative range: Low - High 14.3 - 15
Stop loss: 14.2 post 30 minutes of US open (i.e. post 10am)
Profit take: any time if hit 14.8
Very short stunt as ES's momentum is very hard to keep up with many earning release yet to come.
Next week
- Johnson & Johnson 23/1 Tue
- Netflix 23/1 Tue
- Tesla 24/1 Wed
VIX - First Pump, then DumpThe new year commenced with volatility in the stock markets. Currently, market nervousness appears to be subsiding, but yields for US bonds are exhibiting fluctuations. Consequently, we anticipate a further increase in the VIX to approximately 16 points.
Subsequently, a decline towards 14.12 points is anticipated, which would be considered bullish for the stock markets.
VIX (Jan) PPI potential reaction rangeThis is for Long UX1 (Jan) positioning (1 day), Entry point is 13-13.05
Today PPI is another eco driver for the week. Indicative trading range for Friday is 12.8 - 13.5.
If PPI is muted. set stop loss at 12.8 post 30 mins of US open OR profit take any time 13.3 during the day (whichever hit first)
If PPI again is hotter than expected, set profit take higher to 13.5.
VIX spot is still have a reasonable gap away from UX1 future (Jan) with Monday is also a holiday, can switch to Calendar spread (short Jan long Feb) after the Long VIX exit or by end of US hrs trading
