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VIX - The 72-Handle PreludeI will reiterate again, as I have in my past posts, notably: Nasdaq NQ - A Fundamental and Technical Warning Signal That if you are bullish on US equities into the future and want to see a healthy economy into '24 and '25, you DO NOT want to see a new all time high to be set yet. Instead, you want a correction. A major correction is just that: a correction. A correction gives a number of elements an opportunity to rebalance and reload so that a new phase of markup, and thus profits for longs, can unfold. The VIX controls a lot of things, namely the price of options. Really, what this means for most people is it controls the price of "protection," i.e. puts. And since the VIX is now trading at a low not seen since June of '21 and in an area of accumulation that spanned 3 years between '18 and '20, if you think a new all time high on equities is coming, you're actually saying that VIX is going to trade to 5. And you may very well be right. It's a very difficult situation. However, net liquidity is coming out of the system, and the indexes and equities rallied from mid-June to mid-August of last year. The algorithm rarely runs the same pattern at the same time twice. Moreover, there's a lot of problems brewing in this world with the War in Ukraine connected to Vladimir Putin and the situation in mainland China with Xi Jinping still at the helm of the notorious and unforgivable Chinese Communist Party. There are handles a major arranged correction in the markets are not going to print on VIX. 1. VIX will not print GFC highs 2. VIX will not print the millennial-titled "Coronavirus Disease 2019" highs 3. VIX will not print 50-handles Instead, VIX, in my opinion, will print a 72-handle. One of the truths in the market place is the easiest and most consistent money is not only that the market goes up, but selling volatility after the dust on periodical propaganda has settled is free money. A free money train always continues and you're never a part of it because you're trying to long MULN and Bed Bloodbath and Beyond for a MOASS. So, let's take a look at the ETFs. There are some notable pieces of evidence in the price action that show something ought to change, and quickly. The first is in the SVXY inverse VIX ETF, which has taken out the pre-COVID high, and by a lot. LT short seller funds: they dead. But a more notable case is that of the UVIX 2x leveraged bull ETF It was 5:1 reverse split to start the year, had one bounce during the bank collapse hysteria, and then lost 80% of its value. UVIX trades under $1 pre-split. You're looking for a MOASS on shitcoins, but here's a real opportunity. Notable is also that HUV, the Toronto Stock Exchange VIX (non-levered bull) ETF, is in a similar boat. It 6:1 reverse split in February, had one bounce, and lost half its value, trading to barely over $3 pre-split. You can care about Canada because there are arbitrage opportunities with the USDCAD currency pair and because our holidays and your holidays are not the same, like "Juneteenth," and so there is opportunity in manipulation. What I can say is that there's an argument, if nothing else, to long volatility in extreme situations as a way of defending your long positions. People are willing to allocate 40 percent of their portfolio to bonds that just don't go up when the market pumps and don't go up when the market goes down. So why not hedge with volatility? That being said, if Nasdaq goes to 9,000 points, are you really willing to hold your $400 NVDIA? Humans never believe in what they don't see. They only believe after they've been shown, and then it's too late. What I truly hope for everyone who has a kind heart is not only that you can preserve your money through the chaos and manipulation, but walk out of the machinations stronger, better, healthier, and with a bright future. For this, and only this, is what you have waited for.
TVC:VIXLong
by LordWrymouth
4
SPX Volatility Index - Short Trade [HUV.TO] - TSXShort Trade set up following increased volatility during stock market correction. Expect further volatility surrounding the FOMC meeting tomorrow @ 2:00 EST HUV.TO - BetaPro S&P 500 VIX ShortTerm Futures ETF Entry - 10.85 Exit Target - 9.00 - 8.55 These are my entry and exit points, view the chart and come up with your own conclusion. The information and publications are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort.
TSX:HUVShort
by Cogg
1
Fed Sparks Global Market Meltdown, Vixplosion Next?Good morning, folks! Well, well, well, the Fed decides to taper this year, and all of a sudden all hell breaks loose in global markets. If you're thinking this entire "recovery" was just one big magic trick of coordinated monetary debasement, you're absolutely right, and the market's reaction to the Fed minutes yesterday (and today) is a perfect demonstration of the farce. It was an ugly overnight session across global markets, and as of 8:40AM, the Dow is down -0.91% to 34,645, the S&P is down -0.77% to 4,366, the Nasdaq is down -0.60% to 14,769, and the Russell is getting monkey hammered, we're down -1.65% to 2,128 (after losing long term ascending trendline support yesterday). Vix is up a whopping 52% this week and sitting at a 23 handle. We're in the process of testing the descending trendline from the March 2020 high around 85. If this resistance crumbles, imo Vix is going to a 40 handle, and possibly a 50 handle by EOM. Don't forget, we have Jackson Hole at the end of August as well, and if the sentiment at the event is negative after the Fed's hawkish minutes, Vix could have a multi-week breakout, sending it back toward last year's high's. We all know valuations are at nose bleed levels, and speculation is at ATH's. The Fed was the only thing standing in the way of a return of price discovery/fundamentals, and now they've folded their hand to inflation. You know what comes next. The dollar is scorching higher this morning - we actually tested the lower band of the wedge around 93.50 moments ago, before cooling back to 93.37. If we see a notable shift in the US Equity Put/Call, we're likely going to see a dollar breakout to our previous target around 95. This would imply a major correction across the asset classes. Simultaneously, USTs are being bid here which is sending rates tumbling also. The last time we saw a divergence this large against the S&P was in February 2020, just before the market crashed. In other words, the bond market clearly knows something stocks don't, and bond investors have been positioning for a crash since the US10Y yield peaked in March 2021. In Crypto, Bitcoin (BTCUSD) slipped back to a 43k handle before recovering some of the losses. We're sitting at 44,486 and looking brittle. Having said that we have the 21EMA just below us at 43,359, as well as the 21EMA (w) around 40,867. These supports are likely to hold in the interim, but if we do get a multi-week repricing of risk, it's highly probable we see a revisit of the July low around a 29k handle by next week. Ether (ETHUSD) also appears to be losing steam here and rolling over aggressively on the weekly timeframe. A retest of the 21EMA (w) around 2,418 would be my base case in a prolonged risk off scenario. Finally, on the data front, we saw initial claims come in this morning at 348k vs the 370k expected, while continuing claims slipped to 2.82MM vs the prior print of 2.899MM. This is actually not good for markets because the hotter the economy gets, the more the Fed will step off the gas. For a change, good news is bad news. The Philadelphia Fed index also came in moments go which shows an ugly divergence between the analysts expectations and reality. We're looking at 19.4 vs the 24 expected. Clearly regional manufacturing/business growth is slowing rapidly, hinting at stagflation dead ahead. Trade accordingly... Thanks for your time today guys and enjoy the rest of your day, it should be a very exciting day of trade! Cheers, Michael. * I am/we are currently long UVXY, HUV
TVC:VIXLong
by Hedge_Of_The_World
10
Is Vix About to Become the Most Crowded Trade on the Street?Global Futures are trading broadly in the red on Tuesday after drifting sideways for most of Monday. Having said that, we're still at ATH's, and looking like a freight train without breaks. As of 9:00AM the Dow was down -0.25% to 35,055, the S&P was down -0.14% to 4,416, the Russell was down -0.66% to 2,202, and the Nasdaq was up 0.06% to 15,134. Despite the parade of perma bulls leveraging their asses to go all-in on this ponzi of a market, the Vix is still holding on to multi-year trendline support with conviction. We're seeing accumulation here, with a high probability of a Vix spike in the near term off the back of extremely elevated asset valuations, and essentially unrecognizable fundamentals/ historic technical deviations. We're up around 5.5% on the day and sitting at 18.60. At 8:30AM we saw Durable goods come in significantly below expectations at 0.8% vs the 2.1% expected. We also saw Durable goods ex-transports come in at 0.3% vs the 0.9% expected. Based on the previous ISM and PMI prints, we may have seen the peak of the "recovery," in Q2, absent another massive stimulus every quarter going forward (not impossible in this Truman Show version of Capital Markets). The S&P Case-Shiller Home Price Index came in hotter than expected at 17% vs the 15.2% expected. Looks like inflation isn't so transitory after all. Powell is a liar. Period. He's doing his best not to bankrupt the US goverment by raising rates. Let's see how well that plays out. Later on around 10:00AM we'll see Consumer Confidence with the expectation of a minor drop from the last print (127.3) to 124.5. The US10Y yield saw a solid rejection at the 200DMA (1.291%) and we're seeing some notable weakness today as bonds are bid on the broad market weakness. We're back at 1.249% and looking bearish. If we see a sell off in equities, yields may crash. Then again, if we hear more talk of taper from the Fed tomorrow, then all bets are off and yields could spike hard on the confirmation of diminishing demand for bonds by the Fed. Imo it's only a matter of time until we get that confirmation, and both the bond and stock market crash hard. Let's see how the cookie crumbles this week... Stay tuned for our live analysis at 9:30AM. Cheers, Michael. * I am/we are currently long UVXY, HUV.
TVC:VIXLong
by Hedge_Of_The_World
15
For Your Eyes OnlyAs the majors drift sideways on Wednesday afternoon, after a bullish morning, Vix is at the LOD (18.16). When you look at Vix from the weekly timeframe, the trend is quite pronounced, and we're at solid multi-year support. It looks like things are going to get very wild, very soon, and from a macro perspective that makes perfect sense. I'm well positioned for anything that comes. As some of you know, my wife and I sold our condo in Toronto a few years ago in anticipation of a market top. We've cut our monthly expenses in half in the past year, and we're essentially debt free. One thing I refuse to be in the second half of my life, is a slave to the government or banking sector. I'm preparing for the worst, but hoping for the best, I guess that's all we can really do at this stage...
TVC:VIXLong
by Hedge_Of_The_World
10
Global Futures Extend Friday's Losses, Vix up 17%Here we go, folks! After an ugly opex on Friday which saw 30% of SPY, QQQ, IWM, and SPX options expire, leading to heavy selling across the board, futures are extending losses on Monday morning. As of 9AM, the S&P is down -1.21% to 4,266.12, the Dow is down -1.44% to 34,067, the Nasdaq is down -0.95% to 14,532, and the Russell is down -2.22% to 2,113. European and Asian markets are also taking it on the chin with the Dax down -2.62%, the CAC40 down -2.44%, the FTSE 100 down -2.13%, the Nikkei 225 down -1.28%, and the CSI 300 down -0.39%. It doesn't look like anyone can hide from the risk off theme today. As you can imagine, risk protection is in high demand with the Vix up 16.86% to 21.56. We're back at the 200DMA around 22, and we look poised to test trendline resistance around 24 as early as today on a break above the 200MA. Based on recent Vix price action after seeing solid support at the multi-year ascending trendline (around 15), we may be looking at the beginning of a larger repricing of risk off the back of higher than expected COVID infection rates last week, as well as growing inflation fears. Here's hoping logic works it's way back into the market going forward (finally). The US10Y yield is puking to 1.225% - we just lost the 200DMA at 1.275% and we're racing toward the 100MA (w), where the 50MA (w) is about to converge, around 1.20%. We should get support here, however, investors seem to be flocking into bonds as a safe haven against downside. The more shaky equity markets become, the more we may see yields crash, at least initially. Bitcoin is back at 30k support, but we're down over -3% on the day, and may be about to lose support, taking us toward 20k, which I believe is the 100MA (w). As risk is repriced, of course we'll see crypto sell off. It's only a matter of time before debt starts to pull flows away from assets, and those with the highest beta, and weakest value proposition, will be hit the hardest. Finally, the dollar (DXY) is retesting wedge resistance again for the 5th time in a month. We're sitting at 92.88 and we're fast approaching the March 2021 high's around 93.30 opening the gates to the upper band of the wedge around 95-96. Things are getting interesting so stay tuned for our live analysis at 9:30AM.
TVC:VIXLong
by Hedge_Of_The_World
4
Futures Sink as Russia's SWF Ditches the DollarGlobal futures are experiencing some weakness this morning after yesterday's rollercoaster ride saw us rise persistently in the morning session, only to be hammered from noon until around 2PM, to then be panic bid into the close once again. The Dow is trading down -0.51% to 34,412, the S&P is down -0.62% to 4,180.38, the Nasdaq is down -0.88% to 13,553, and the Russell is down -0.81% to 2,278.25. Headlines are circling the financial media this morning after Russia released a statement that they'll be cutting the dollar from their sovereign wealth fund, replacing it with other core SDR fiats (Euro, Yuan), as well as gold. Vix is seeing a notable bid off the week's low's and is back at 18.8 resistance and up just under 12% on the day. We need to recapture the 21 level for another potential test of the descending trendline around 28. The Dollar (DXY) has recaptured 90 support, and is currently sitting at 90.24 as of 9AM. Clearly we're seeing liquidation across asset classes. But, the dollar gains never stick for long these days. Bitcoin (BTCUSD) is up over 4% on the day and sitting just under 40,000, while Gold is off the recent high's and trading back at 1,881. No major moves in the bond market to speak of as the US10Y yield drifts sideways at 1.60%. As far as memes go, AMC is tanking back to a 59 handle after hitting a high of 72.62 yesterday. Holy shit, we closed up 95% on the day. I've never seen anything like it. The company is a hollow zombie with too much debt on the books. Cinemas are closed, and who knows what their future revenue will look like. But, that doesn't stop the army of retail traders who are throwing every dollar they can at the highest beta stocks they can find. GME had a nice breakout of the triangle a couple weeks ago, and is up 27% on the week. We could be looking at a similar scenario to AMC unfolding, which potentially provides an opportunity to short these pieces of garbage back to unch at the first sign of a shift in sentiment. Economic Data: Finally, Jobless claims came in at 385k vs the 395k expected, and continuing claims rose to 3.771MM vs the 3.642MM expected. The ADP employment change rose by 978k vs the 675k expected, however the real headline here is that over 15 Million American's are still on some form of government employment benefits. We'll see the ISM Non-Manufacturing Index for May at 10AM, and Crude Inventories at 11AM. Our live anaysis begins at 9:30AM. * I am/ we are currently holding positions in UVXY, HUV.
AMEX:SPYShort
by Hedge_Of_The_World
2
SPY Rejection (Again) at White Channel ResistanceHey guys, sorry I missed you yesterday, I had a busy day of meetings and was away from my desk. Let's get right into it this morning. US Futures are struggling to hold on to the (weak) overnight gains, which saw the majors bounce between quarter and half a percentage point as of 8:30AM. We saw jobless claims come in hot at 779k claims, but better than the 825k expected, along with 4.592MM continuing claims. I love how analysts are still expecting over 800k claims each week, while they simultaniously, and almost unanimously, suggest that the economy has recovered. When all this debt binging ends, (if ever), and stimulus payments aren't enough to replace GDP, what then? NIRP? According to the ECB, banks should start preparing for NIRP. I guess the ignorance at the central banking level knows no bounds. On another note, unit labour costs came in more than double the expected 3.3%, at 6.8%. Vix continues to get battered, and is back at the ascending support trendline, and descending green dotted trendline, which went from resistance to support on Jan 27th. We should see strong demand for risk protection at these levels, especially considering the dollar (DXY) is extending it's recent breakout, and hit a new high of 91.485 moments ago. We're now seeing some light selling as we approach the open. But, with rates (10Y yield is retesting the recent highs, and we saw a 1.155% print earier this morning, before pairing some gains), and the dollar gaining momentum, we may continue to see pressure on bond markets, and equity valuations in the near term. Gold has lost the 200 day MA ($1,851.32), and is looking quite bearish at the moment around $1,819/oz. We're in a medium term descending channel, and the recent low is back in play at $1,764.73. Silver is also taking a beating, with the SLV back at a 24 handle, after hitting a 27 handle on Monday. Bitcoin is looking strong, but also may be topping, as we revisited a 38k handle this morning, while Ether almost caught a $1700 handle earlier on. SPY continued it's rebound yesterday, with another solid, but short lived retest of the upper band of the white channel (around 383.70). The 21 day EMA, is sitting at 377.60, and barring a break above the white channel, this is the next logical target, which suggests a notable pull back in the immediate term. We're also seeing quite a few light supports on the hourly, with the 21EMA (h) at 380.64, the the 50 MA (h) at 379.16, and the 200MA (h) at 376.87. The lower band of the white channel is now sitting around 372, and has seen persistently heavy support at this level. This is my target for EOW. We look poised to open near the gamma neutral zone, around 383, and we'll see if upper white channel resistance can hold off the infinitely deep pocketed bulls. If the bears successfully defend this level, we're going lower... Thanks for your time today guys, and I hope you enjoyed the analysis! Stay tuned for our live daily play-by-play to begin shortly at www.hedgeoftheworld.com Cheers, Michael. *The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
AMEX:SPYShort
by Hedge_Of_The_World
14
Face/OffGlobal futures are tanking again on Friday morning, with the US majors down around 0.8% pre-market. We're seeing a sea of red across Europe and Asia as well, with the DAX, CAC40, FTSE100, and Hang Seng all down around 1.5%. Vix is catching a strong bid this morning, and is back at a 33 handle and up around 12% pre-market. The short squeeze bonanza continues this morning, with hedge funds suffering max pain, as retail investors trample on their shorts, one by one, and in carefully coordinated fashion. As we mentioned yesterday in our analysis, "As hedge funds continue to suffer massive losses from these running short squeezes, they're forced to liquidate their long positions in the most loved companies. This could be why we're seeing broader market weakness this morning despite strong quarterly earnings reports." The dollar (DXY) is trading flat, and hovering between the descending trendline, and IHS neckline just above. A break above the neckline could put major pressure on risk assets. The 10Y yield is blowing up this morning after a strong bounce near the 50 day MA. We're now back above the 21 day EMA, and sitting around 1.09%. In Crypto, Bitcoin is soaring after Elon Musk tweeted about the asset, and changed his Twitter description to simply "#Bitcoin". At 3AM on the dot, Bitcoin went parabolic, and rose by as much as 15%, back to a $37k handle. Maybe the SEC may want to look into this? Wait, who? While crypto's are soaring, so is good ole' original money, Gold. We saw a strong bounce off the 200 day MA at $1,849/oz, and we're up 1.5% on the day, and sitting at $1,870. Needless to say, we're seeing a risk off mood across the board as we approach the cash open. Key levels to watch today on SPY are the 21 day EMA at 377.47 for strong resistance, and the 50 day MA, sitting at 370.55, for strong support. The 50 is actually overlapping the lower band of the white channel. If bears capture this level, the almighty megaphone is back play, around 361. As I write, we're getting panic bid towards the 21 day EMA. Let's see what the hedge funds have to say today in rebuttle to the WSB crowd. Thanks for your time today guys, and I hope you enjoyed the analysis. If you'd like to follow the price action all day, join us over at the Hedge of the World website for our live daily play-by-play. Have a great weekend! Cheers, Michael. *The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. I am/ we are currently holding positions in UVXY , HUV, HQD, QID.
AMEX:SPYShort
by Hedge_Of_The_World
6
Vix Continues to Look ResilientWe're consistently making higher lows, and I suspect this time is no different. Maybe it's just me, but Vix looks incredibly cheap, considering the fact that half of America's GDP has just been replaced with a printer. We're going to run into the long-term descending (green dotted) trendline soon, and Vix will explode. The current policy path is not sustainable, and if Vix is indicating accumulation from institutional (smart) money, then that's what I'm buying. I'm currently holding UVXY, and HUV, along with a couple Nasdaq shorts. I'm paying out the ass in premiums, but I'm working my position so I don't miss the main event. This next "correction" is going to be epic. If anything changes with my positions, or outlook, I'll post an update here for you guys immediately. Cheers! Michael. PS Don't forget to check out the Hedge of the World website for our live daily play-by-play of markets.
TVC:VIXLong
by Hedge_Of_The_World
23
They're Just Giving it AwayRisk protection is looking incredibly cheap right now. We're making higher lows, though, and looking ripe for another spike. Let's see how the week progresses, but I suspect once we cross the upper green dotted line, we're going to see a notable correction on the Majors, and Vix back in the mid 30's. If we see continued downward pressure on markets as February approaches, Vix is going to a 40 handle, which is my personal target to exit my UVXY and HUV positions...
TVC:VIXLong
by Hedge_Of_The_World
15