- What I've shown above are two bullish wedges. The first one is the wedge building up to the covid crash and the second one is the current setup - I want you to focus on the price action after the wedge breakout - There's an initial breakout, followed by a re-test, and then a crazy explosion in the VIX; i.e. market crash - The exact same price action seems to be playing out again. We've even got the bullish follow through candle like last time
TAKEAWAY: This week started off as a big gap up (for VIX) so if this fractal has to play out exactly, something big should happen tomorrow (dec 23) itself or latest next week. I'm even more confident about this setup because my longterm cycle analysis makes this week very special.
Comment
⋅
just to be theoretically correct, the first one is a triangle; I referred to both of them as wedges in my post; my apologies !
It is a great idea... question is... is it worth it going short the market over a long traditionally positive seasonally 3 day weekend...
tfinavia
⋅
@TomNewYork, totally worth it if you're a trader. See monthly vix futures too. Monday won't be too late. People will go long the stocks thinking the same script play as this week.
markethunter888
⋅
@TomNewYork Given the complacency in the market ( put call ratio) yes I definitely think it’s worth it to take the trade. The instrument I’m using for this is uvxy
tfinavia
⋅
@r3anand, Anand, for additional confirmation we can chart the stocks (total market or bellwether) to bonds ratio which is showing exact same script playing circa January to March 2020, where November was akin to January. I used IEF/USB chart. VX monthly futures closed November above mid monthly BB that's also same like January 2020. TLT/VXV also showing similar to 2020 swoon.
On the match, we're looking at a quick dive next week followed by a spectacular new year rally, maybe for a week or two.
markethunter888
⋅
@tfinavia nice to get confirmation from another form of analysis. Thanks for sharing
TomNewYork
⋅
The IWM seems to be having some issues getting a rally going...