I use the VIX / VXV ratio to monitor VIX futures for contango/backwardation. A peculiar thing has been happening over the last 2 weeks on this admittedly ugly (but it looks great on a 4k mounted in my office) chart. VIX has been rising slowly over last 3 weeks and, more substantively, the VIX/VXV ratio has been rising too. As a result of that ratio rising, long...
This is not looking good. The spread between the 90 day volatility index VXV and the standard "fear gauge", the 30-days VIX continues to grow. The growing spread means there is elevated put option buying in July August, September SPX cycles. While at the same time there isn't any fear near term. I am contemplating an SPY put purchase. Perhaps I will buy a full...
Earlier this week we wrote: "In the first half of the week would not surprise me to see a consolidation and then resume the" leg bullish. " , And this happened (see link below). Now the expectations for next two days are for a possible rebound. If that were true, we should see a possible strengthening of the short net position also on the SP500. Friday we will...
After many months of fight, the markets are ready for a correction. 3-3-3-3-3 formation /Ending Diagonal / on the SPX is almost ready. Bearish Three Falling Peaks may end this structure on the current levels. Who will win this battle? One thing is clear - the market needs correction. www.elliottwave.com thepatternsite.com
I'm not a lover of the classic indicators, I prefer to look at the price and follow the swing. On the contrary, the VIX as well as the COT , can be an interesting indicator. If we look at the graph, we can see that after each double bottom, the price has rebounded. The "DB" have never gone to the target, but at least a rebound occurred. This week will be very...
When medium term volatility index VXV remains expensive while 30 day VIX gets cheap, watch out! Historically it signified local Market tops.
The VVIX (known as the "VIX of the VIX") makes its way down to under 77, watch for the VIX to go back under 12.50 like it did last summer. Is that a guarantee? Well - remember that VVIX measures the volatility of the VIX. If the VIX is getting less and less volatile (as the VVIX channel clearly shows it is) then one can expect that fact to be a product of lower...
I read an article the other day claiming "The VIX is Very Predictable" It claimed the method to buy/sell "the VIX" (which itself can't be bought or sold) is to take the 11 day ema and sma, plot them and buy when the ema goes under the sma, and sell when the ema goes above the sma. Here is a chart of the vix and a little indicator that I coded up using the...
VIX is an important indicator to watch when there are big moves on the market. I do not do a daily update although I do watch carefully everyday the index as well as other volatility index. But a monthly update is rather good. I will add my previous studies about VIX so that you can watch carefully the evolution of the volatility. On the macro economic front,...
HUI (Gold Bugs Index) throws signals relative to the VIX that are pretty obvious and allow plenty of time for entries and exits. I'll describe how in a minute - before that think about the aspect of Gold trading that is a "worry trade" and think about what the VIX is. As that sinks in, you realize that gold buyers are often playing a much longer time frame than...
UVXY contango is fairly reliable except when sustained high VIX numbers are posting, The ratio of UVXY to VIX reveals contango / backwardation channels that are predictive to the degree that any trend channel is. This is very helpful as a ratio to forcast UVXY relative to the VIX. Pictured is the current channel with an elipses and "price" tags at the upcoming...
bouncing up from upward blue channel, back above 10 month MA.
The falling wedge is a bullish reversal pattern. He suggests the upcoming correction on the stock markets. The potential head & shoulders will give us more growth. thepatternsite.com
I understand that Friday is not the best day, with quadruple witching day. Volatility and specifically the broadly traded VIX futures is possibly a bad indicator considering expiry volatility and the numerous covering taking place for the next month/quarter, but VIX was holding up surprisingly well on Friday considering the S&P spent most of the day at its...
The nice thing about TradingView is that you can create custom hybrid charts. For this one I'm looking at short term volatility vs longer term volatility. When the ratio gets above 1 it seems to indicate a bottoming process. We are not there yet.
As always, a work in progress. But I like looking at these charts. I've started to add notations on each chart such that my own interpretation is more clear. Again, the concept is to look for signs of rotation to safety. As such, we look at rotation out of small cap (risky) stocks into large cap stocks via IWM/SPY; rotation from growth into dividend (SPY/PFM);...
10 month MA base formed (red), start to tick up. Upward channel is well formed now (until it breaks). This means increasing volatility may be in cards, but does not necessarily mean stock market will dive.
Options are a fantastic tool to create the weekly and/or monthly income that we need to support our lifestyle. Selling options is selling a financial insurance product. As the seller we are also the underwriter of the policy. When selling an option contract only one of two possible outcomes can happen...either you will get assigned the underlying asset at the...