I'll be looking closely at SPY, VIX and SKEW to get long SPY at the bottom once more. For now sitting in cash and with a big TLT long position, as well as my USDCAD short trade.
Best of luck,
Ivan Labrie.
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We did call for more downside, didn't we? Now all the doomsday fanatics show up, patently late, I think we could see a bottom soon. Main thing that might keep the market sideways and not trending lower is that a lot of money that was on the sidelines might be released to be invested thanks to the tax cuts, people focus too much on tariffs and trade wars, or interviews to prostitutes and miss that fact.
Overall the best strategy going forward is to buy short term bottoms in SPY, and also short rallies optionally, from a trading perspective. From a longer term perspective, each of these big drops in SPY set up nice buy opportunities in cheap value stocks.
VIX could be in a bigger uptrend, we will watch it closely to buy the bottom in SPY once signaled by it and sentiment readings.
Trade closed manually
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Our timing signal worked, VIX topped on the day I had estimated it would. Stocks formed a base and bottomed for now, we might retest the top of the range...nice breakout today. Our longs are paying off considerably.
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#VIX could trend lower as SPY recovers and approaches the ATH zone again
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#VIX bottomed at my target zone... It held the low volume support zone in the spike that happened on May 4th, now since then, it rallied more than $5 from that low, which is the point where I'm getting greedy. Looking to buy the market. Need to see selling get exhausted first, watching...
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Smart money supported the market again when retesting the peak of their buying spree range. If VIX falls to 12.9, we will have a new support zone to label on https://charthttps://www.tradingview.com/x/psRSaTY4/ I think we might even see new all time highs on this leg up here. But, I suspect afterwards we will correct down again, since the market is likely to remain sideways all year.
@aa2016, thanks, we had a good signal on chart, avoided the drop and managed to buy the bottom in TSLA and a few other good names like GM.
Hope you benefitted from this analysis too!
Cheers.
nakov
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Hi, Ivan, in some of your statements you talk about VIX and SPY interchangeably and it is somewhat unclear, so may I ask - you consider that SPY will bottom soon because of all the money on the sidelines? That means lowering VIX, but you say that VIX could be in a bigger uptrend at the same time, i.e. VIX, i.e. volatility rising. Could you please clarify? Thanks.
IvanLabrie
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@nakov, it's still unproven if the trend in VIX goes higher. If it does then SPY will be going further.
VIX = SPY options volatility but it also is a market liquidity gauge.
I think there's a tug of war between cheaper stocks not falling or rising and expensive ones trading turns at falling sharply (like FB).
Sentiment and positioning of traders is too bearish, this gives the market support on each down swing (puts 4x more expensive than calls...).