so instead ill just say that my favorite inverse index fund is in full breakout mode! nothing is stopping this from running away with everyones presents, so if you have a gift i would share it now. that being said we are at the top of nadaraya watson envelope, and the nasdaq is in extreme oversold territory, so im expecting a bounce followed by continued melt down...
theres a really bullish sentiment playing out on the daily, but technical indications are that we sell off a little in vix. ive circled the type of cross i want to see, and highlighted what could gappen if we dont complete the bearish pattern.
over $23 or under 16 in 1 week
If we break to new highs it's almost a guarantee that, provided we are hitting new lows in multiple important sectors like tickers xlf, qqq, spy, we take this over 19. The only real guarantee is that whatever high we hit in UVXY we are seeing lower prices soon. low 14s is where I'm drawing these hypothetical puts expiring a me to.e early March. This is based on...
the upside in short term vix futures remains muted as limitations on how far out broader market shorts in the money puts are due to backwardation in front month contracts. this is leading to derivatives like UVXY to probably continue to sell off of overbought.
we could find ourselves back in the low 14s UVXY if we see 22 vix again which should be soon. if we go...
when we cross this vwma, and the level of .618 retracement doesnt hold uvxy drops really big really fast. algos could flip bear at any moment, but there is bound to be at least one bounce worth noting between here and $12
just as spx is in a buy sided tightening range top, vix is in a sell sided tightening range bear.
referto the below chart for that pattern on the 1 minute
if UVXY cant break this range bull then broader markets remain a buy as long as vix puts keep piling in
if we make a lower high and continue down this is a solid confirmation of bear vix
short term vix futures have put in a multiday high and many broader market sectors are breeching their intraday lows at the same time
this could have a longer term effect, but i think the short term movement in vix will trend back toward 11.89 uvxy
if we build a base of support above 12 and move higher we could be in for more like 12.30, but keep it on the pivot...
getting to an area where longs from this morning are breaking even and shorts in broader markets will be squeezed
provided we dont break to new highs in uvxy this is an interesting area to topfish
target for short 11.65
broader market health permitting we should be finding a lower high in sqqq and retracing back into the channel below mean regression and vwap
should we set a lower high than 6.15 and break 6 convincingly i wouldnt be surprused to end up around 5.92
