SPY down, VIX up - New Swing Trades for Near Term Market Shift
SPY chart
> price opened above turning point for last down cycle but is in resistance (between two yellow lines)
> price is very extended from 20sma
> red arrows show RSI and stochastic will turn lower
> RSI after two dips below 33.33 has not been able to get over 65 even with such a strong rally (indicates weakness underneath, which may soon give way to selling)
VIX chart
> yellow support line shows a low risk entry for VIX calls or any other volatility product
> IV continued dropping sharply as dealers bought back short hedges and put volume reduced
> now market complacency will jumpstart VIX to life if put volume starts rising
> RSI dipped below 35 and should turn back up soon
> the last two time stochastic %D dipped below 5, a sharp increase in IV soon followed
Trade notes
> Use swing trades to capture good price action
> April monthly options expiry leans bullish for now, so on a market pullback take profits
> For SPY day trades, be firm with your entry and exit and trim profits so you don't give it all back
> price opened above turning point for last down cycle but is in resistance (between two yellow lines)
> price is very extended from 20sma
> red arrows show RSI and stochastic will turn lower
> RSI after two dips below 33.33 has not been able to get over 65 even with such a strong rally (indicates weakness underneath, which may soon give way to selling)
VIX chart
> yellow support line shows a low risk entry for VIX calls or any other volatility product
> IV continued dropping sharply as dealers bought back short hedges and put volume reduced
> now market complacency will jumpstart VIX to life if put volume starts rising
> RSI dipped below 35 and should turn back up soon
> the last two time stochastic %D dipped below 5, a sharp increase in IV soon followed
Trade notes
> Use swing trades to capture good price action
> April monthly options expiry leans bullish for now, so on a market pullback take profits
> For SPY day trades, be firm with your entry and exit and trim profits so you don't give it all back