VXN (NASDAQ's VIX) Fighting Back 7/23/2020
This is the VXN at the 4 hour view.
Okay. I was wrong. I thought the volatility run would be early next week. The VXN tested support early this morning and then found that support. It created a double bottom pattern and started running. It's fighting against the high liquidity.
Personally, I am happy that volatility is coming back. Chaos and panic to a group of permabulls is an opportunity for experienced traders.
Why did the VXN rise? It's because the NQ has entered the distribution cycle. Institutions are smashing that sell button while Robinhooders and new traders kept buying more tech shares out of hype. Today, the supply of buyers ran out. The P/C Ratio of the NQ was very, very low (below 0.50).
VXN was giving a warning for nearly a week now. It's why I didn't long this week. This is how you use the VXN and VIX to your advantage. You can exit longs when it's firing warnings like that. You can wait for the pullback to be over then re-enter long positions at a major support. Ride the bounce.
Okay. I was wrong. I thought the volatility run would be early next week. The VXN tested support early this morning and then found that support. It created a double bottom pattern and started running. It's fighting against the high liquidity.
Personally, I am happy that volatility is coming back. Chaos and panic to a group of permabulls is an opportunity for experienced traders.
Why did the VXN rise? It's because the NQ has entered the distribution cycle. Institutions are smashing that sell button while Robinhooders and new traders kept buying more tech shares out of hype. Today, the supply of buyers ran out. The P/C Ratio of the NQ was very, very low (below 0.50).
VXN was giving a warning for nearly a week now. It's why I didn't long this week. This is how you use the VXN and VIX to your advantage. You can exit longs when it's firing warnings like that. You can wait for the pullback to be over then re-enter long positions at a major support. Ride the bounce.