Because UVXY is subject to contango, it periodically has to undergo reverse splits to keep it from going to 0. The last split occurred in May of last year, when UVXY was sub-10 and it is getting close to that area here. In a nutshell, reverse splits wreak havoc with options positions ... . I won't go into the nitty gritty details here, but the Options Clearing...
With the CBOE Volatility Index at 13-ish here, there is nary a premium selling play in the market ... . Naturally, that can quickly change, but in the mean time, it's "housekeeping time." "Housekeeping time" is a largely boring affair: 1. Look at Setups for Delta Balancing. If you've been reading any of my posts, you'll notice that I largely concentrate on...
Number of touches on this line show a consolidation or bounce may be time to leg into some VIX plays. Volatility should pick up soon. $UVXY is not a good swing but a good day trade if picks up.
Despite testing highs we are not seeing an increase in cumulative buying that would generally support "new highs."
Where has this weeks trading taken price action in relation to the monthly long-term mean?
SPY is showing signs of distribution on the 5 minute timeframe. Prices could close the "gap" and still only fall to the 50% Fibonacci retracement. This would leave the markets in idle and indecisive and bull bias would remain intact above $204.44
We will be trading within this tight triangle for a few days until we break in either direction?
Plenty of idiots are still long this ratio at this level. Watch the lines. Being short this ratio has much more upside than being long this ratio at this point.
We will have to be very careful about the case that VIX breaks out and SPY breaks down. That is one possible outcome but can be a very damaging one.
Long $VIX $UVXY and short $SPY until 203
AMEX:VXX INDEX:VIX AMEX:SPY Short SPY FX:SPX500 AMEX:UVXY
As a premium seller, one of the instruments I constantly keep an eye on is VIX because, as I general matter, I don't like to sell 45 DTE premium in broad market instruments like SPY, IWM, QQQ, or DIA when VIX is below 15, opting instead to (a) sit on my hands; (b) sell premium in those underlyings farther out in time where implied volatility regularizes (>90 DTE);...
Check out 20 EMA cross over 9EMA on SPX500 and response in VIX