This is just a thing of beauty. We called this one over a week ago, and I just want to say congrats to all the bears who traded this one smart. Well done on this trade!
The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research.
📌 Vix - Volatility
An expansion of volatility is coming; the attempt to step against the flow of Covid chapter II is reckless to say the least. According to my models, we have unfinished business to be done at 85 once more. I will continue to hold longs and look to add on dips for example towards 25, or enjoy a momentum gambit when we see the breakup.
After the crash in March, volatility has settled down towards the bottom and is now reversing its trend. I think ~220 was the bottom, and we are set to continue higher for the coming months. Expecting a major move to the upside to happen soon as the market resumes its declines to retest the lows made a few weeks ago.
A quick update to the Vix chart as we enter into the final important NY session of the year with quadruple witching. For those tracking the previous flows we remain in the same levels with the same targets and the same flows to track:
After we cleared TP1 we ran out...
Vol completed the grind towards the "Capitulation Waters" as widely anticipated:
We are now tracking the response as cascading takes place. Escalation in range breakouts look likely, I think from here Vix losses are to be limited as market focus shifts back to risk events such as...
A good time to update the infamous "Capitulation Waters" chart idea, let's start with a recap:
This chart came after an update from the previous +40% swing which we traded live in Vix earlier in the September...
I am a believer that this bear market is not over.
seems unlikely to me that the longest Bull market is followed by the shortest Bear market (I stole that).
Since the advent of QE and massive Central Bank stimulus programs Volatility has been suppressed significantly.
Technically the VIX volatility index at ~$18 is a buy in my books.
Got in last week just below...
Short UVXY via long Apr20 put debits for $2.19.
Max loss: $892 (2.19 x 4)
Max Win: $308
ROC: 34.5% over 66 days
Long 24 put: 36 delta
Short 21 put: 30 delta
I usually let these expire ITM, as my broker TW has cheap exercise fees. In the case that it expires in between strikes, then I will have to manage them by closing on expiration day.
VVIX measures the volatility of volatility. It's an expected move in volatility, which is an expected move in stocks. Thus, it is another layer of looking at the market Last time VVIX traded above 120 was during Brexit in June 2016. This is extreme fear!
Looking for consolidation from what appear to be another bottom. Huge spike up as Eth briefly touches another bottom. These bottoms look to be very profitable and a retrace like this is healthy to form a base for a new breakout.
Description of Chart :
With the VIX there is still potential to get into the 10's. I am looking for it to get slightly lower (around 10 - 10.5). At that point I will take a small long position.
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The best Idea to play BOJ and FOMC from a risk-averse perspective is to own both in a Long Straddle
Dynamic Straddle: Long USDJPY & Short GBPJPY - TP from volatility & Event likely hoods
TP levels = cannot be greedy else you may miss one trades exit point so <25 pips when it goes in your direction for each - total TP = 50pips as 2*25pips
I suggest you check out ALL of the relevant articles that i attach to this post so that this post makes sense
SEE PART 1 ALSO
GBPUSD historical Price Action
The findings of previous the attached "Price action history posts" led to the conclusion that referendum history clearly wasn't repeating itself however IMO because this is the case it has opened up...