Shwayze
Long

Risky VIXY falling wedge, as economy future uncertain.

AMEX:VIXY   PROSHARES TRUST II
I am long on this, but it's best to wait until you can actually see it break some trendlines . This EFT will punish you if you are a long time holder.

With so much uncertainty lately, what better than to take a closer look at the "Fear Index". Garunteed to lose about 20%/year, this fund is only beneficial during times of the market crashing. Basically, the SP500 crashes, this volatility fund goes up. I am keeping an eye on this, as any imminent crash will double/triple this chart. In the meantime, we can see it go lower as expected. Let's look at reasons why it would spike or decrease:

Let's take a look at some destabalizers (reasons this chart should go up), and then reasons the economy might stabalize (reasons for this chart to fall) as well.

Covid - a huge reason we are actually in this mess is the new pandemic gripping the world. Many US businesses have shut down, or stopped operating in the office, and started sending employees home. While many were able to hold onto their employees, the bigger businesses are even starting to let employees go within the next couple months. The smaller companies have already started that trend.
Unemployement- This is real, a growing number of people unemployed collecting benefits. A new stimulus package is certainly underway, however - it is said this could take weeks, and many jobless claims may suffer. This is a perfect driver of the fear index. As time goes on, the unemployment number HAS to have an impact on this economy. There is no way around it. Even if the Fed drives money in, a crash is certain. Just takes one bankruptcy (see 2008). This brings us to my next point:
Covid unemployment benefits: - Normally, a stabalizer, however there is no policy putting this back in place immediately. What happened when congress failed to agree upon/enact a budget in 2008? Crash. Hopefully this won't happen, but as time draws near, this could have a major impact on the performance of the market.
Earnings - This is both a destabalizer as much as it is a stabalizer. Companies (like ATT (T)) are posting good numbers and may continue, however - we cannot ignore that the numbers have been adjusted and are lower due to the pandemic that is occurring now. We are expecting some HUGE companies to post earnings next week, and if they are below expectations, we may see some volatility crank up.
Current market - We can see now, Gold futures are on the rise, SP500 is losing points for the last couple days in a row. Negative Market conditions can and will impact the outlook of the overall market.

Stabilizers:
The Fed - The Fed is pumping money into this economy just like they did when they doubled the Federal Reserve back in 2007, 2008. This leads to a pretty wil impact on the stock market, which is inadvertent because their main focus has been the credit market (if this fails, we're really screwed). So we can see since March, the Federal Reserve Balance sheet has increased quite a bit - almost doubling again, which may be why the market has been performing so well.
Stimulus money - We are also earning some extra income for everyone, and especially the unemployed, receiving an extra $600/week cushion! This really helps out, and his absolutely needed, but this will obviously have a bigger unwanted impact later on. Regardless, for now, this helps stabilize the economy, and the market.
Election year - As was 2008, but you think the sitting president wants to see a market collapse during their term? No. Expect to see as many bailout bills create as possible to avoid or minimize impact , regarless of future impact this will have. Who cares about 3-4 terms from now? As long as the President can keep up the illusion of a stable economy, it will be stable. It's as easy as that. Once people start to react to fear or greed, you can expect this stock to skyrocket.

Comments

Cant wait for this to rise. Is this correlated with the VIX or opposite to the Sp500? I see the VIX on cnbc rising. but this falling. Thanks for sharing :)
Reply
Shwayze oilyprata
@oilyprata, This is more of a futures based VIX, so it will not correlate with VIX exactly. You will notice it correlate to SP500 more. I believe we may see a drop from here down to $17-18, but I have a big buy in under $14. I did ride the last one up, but I had a sell at $29, and did not sell in time. The tech rebound was slightly befuddling, and I know that the announcement from the FED was seen as bullish.
Reply
oilyprata Shwayze
@Shwayze Thanks. Appreciate the explanation, it is super helpful to know what this ticker is. Agreed, the tech rebound was truly befudding. Apple did dip yesterday but the Fed announcement :( Think I will sit on the fence for now, till 18.
Reply
‘Stabilize’ ... giving yourself a moniker does not elevate common knowledge to insight
Reply
Shwayze captnK
@captnK, Holy smokes, did I spell it wrong??? Thank you so much for pointing that out! I didn't realize how lost I was, until you gave me that tremendous ability to regain my sight... Now that I can see again, can I hire you to proof read all the rest of my publications, including charts on this site? Could you follow me around, and provide me with more quotes like that, ones that are slightly vague and can be applied to any parts of my life - but I will think of them as 'PROVOCATIVE', perhaps one day I might even feel "Woke"!
Reply
NAK1987 Shwayze
@Shwayze, Thank you for that wonderful "WOKE" reply . Appreciate the publication and I am waiting to long VIXY but already short QQQ as of around the time it broke 20 DMA to help keep my account neutral but If we see continued selling this week and especially after the FOMC meeting I will consider a short term longv on VIXY too . Good luck on the trades .

I estimate that this is just the beginning of the selling on the markets through September and expect a bearish trend to continure until the election , especially with seasonality taken into consideration. Oh , spelled continue wrong where's our proof reader when you need him :)
Reply
Shwayze NAK1987
@NAK1987, I just can't help myself sometimes! :)
Reply
Home Stock Screener Forex Screener Crypto Screener Economic Calendar How It Works Chart Features Pricing Refer a friend House Rules Help Center Website & Broker Solutions Widgets Charting Solutions Lightweight Charting Library Blog & News Twitter
Profile Profile Settings Account and Billing Referred friends Coins My Support Tickets Help Center Ideas Published Followers Following Private Messages Chat Sign Out