The_Unwind

IF You're Bullish, Look at Breakout VIX Levels Before You Buy !

CBOE:VIX   Volatility S&P 500 Index
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In an earlier post here this week on tradingview.
I wrote that the VIX was in the process of a major volatility breakout.
That upside breakout happened on 12/19, when against the markets wishes,
the Fed raised interest rates AGAIN.

VIX shows that FEAR is now being priced into index options,
which certainly could be seen as a contrary indicator.

HOWEVER,
THE Technical Breakout Pattern in the VIX shows clearly
that the MARKET IS STILL EXPECTING CONSIDERABLE DOWNSIDE RISK.

That should give the bulls, who may be anxious
to get back into the market at these levels... CONSIDERABLE PAUSE.

THE VIX is telling you that the macro market TREND is STILL DOWN.
and to expect potentially sharply lower prices ahead.

DO NOT Make the mistake you are wiser than VIX traders,
who price in volatility every second of the trading day.
THEY ARE without a DOUBT the most savvy,
wise and highly leveraged BIG MONEY traders on the street.
They make SUBSTANTIAL Recalculations of volatility in Seconds.

When the MARKET finally decides to BOTTOM,
it may do so in such an IMMEDIATE and INSTANT WAY
that prices may ROCKET STRAIGHT UP in SECONDS !

That makes SHORTING the market,
as extremely risky right now, as being long,,
and just HOPING price bottoms occur somewhere soon.

I have a monitor in my home office,
where I am watching the VIX on a 1 Minute Basis
every single second of the trading day.

I strongly suggest that if you are a trader/investor
trying to manage substantial risk in this market right now,
that you do the same.


Monitoring the VIX level throughout the trading day,
will keep you one second ahead. Sometimes that is all you need.

Until the VIX closes below 25, which is over a 10 % drop from here,
I suggest you much pause,
before thinking of BUYING ANYTHING LONG in the stock market.

Preservation of Capital is the hallmark of a good trader.

The opportunities you think are there now, will certainly be there tomorrow.

WAIT,... UNTIL THE MARKET, AND THE VIX , TELLS YOU IT IS TIME TO BUY.

VIX LAST 28.41

THE_UNWIND
12/21/18 820 AM
NEW YORK








Check this out - This isn't even near done yet :
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Just closed out my SPY shorts..hit my target.
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I’ve made great returns on my spx shorts (spxs) but this morning decided to place a decent long (spxl). Hoping for a 5% profit.
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Teklologist Teklologist
@Teklologist, well, looks like I should have stuck with spxs haha
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That said, brilliant advice on the VIX minute chart that is pure gold. <3
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Vix down 5% ES breaking out of the downtrend channel (without confirmation) most oversold conditions since 2008 and amazon is sitting on it's weekly pivot. Longing amazon from here. Happy trading!
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David_Scott David_Scott
@David_Scott, and the FED is on TV trying to calm the market down as well.
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David_Scott David_Scott
We also filled the volume gap between 2650 and 2450. I would be very surprised if we dip below 2400 within the next few weeks.
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My understanding is traditional technicals don't work on the VIX.
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Thank you so much for bringing wonderful information. I also keep an eye on VIX but breakout of VIX is totally new idea for me. Of course market movers will bounce the market at some point and shorting the market is always has riks but do you think after sky rocketing the prices, they are able to sustain the momentum as well?
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