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VIX/VVIX Divergence before large drawdownsJust happened to be playing with a few things on tradingview today, thinking of new ways to identify trade opportunities. I often have to keep reminding myself to zoom out to see the bigger picture. This is one of those instances where I might have stumbled upon something useful for very long term trade trends. As many know, VIX is an extremely useful indicator of market sentiment, it also signifies part of what makes up extrinsic value of options contracts. On the longer term time frame, you can see in a bull market volatility slowly compressing lower and lower. Lower highs, lower lows. Eventually, that trend starts to reverse as more and more large players maybe begin to take profits and go short, and more options hedging happen towards the downside. VVIX is a further still derivative of that. It's the measure of volatility of volatility. What I did today was take VIX and divide it by VVIX and see what pattern emerged. At a glance, it's not far off VIX by itself, but, I did notice that weeks or even a couple months before a large market downmove, it gives a little more advance warning that a big sell off was imminent. A solid warning is the lowest low followed by two higher lows, as seen here: If I instead plot VIX by itself, you see a double, maybe triple bottom at near enough the same low before you get a higher low. In the case of the second half of 2018, there actually wasn't an advanced warning at all: But, what VIX by itself does show, that VIX/VVIX did not, is a lower high when the market found bottom in October/November 2022. VIX showed a lower high, VIX/VVIX shows the highest high at that point. So, always worth glancing at both on a long term chart if you're looking for very long term bets on the market and trying what normally is considered a fool's errand to call the tops and bottoms of every bear and bull cycle. It might still be a fool's errand, but maybe this helps some of us get a little closer to being able to pull that off. With that being said, we have just set a new low in both VIX and VIX/VVIX for the year, even though we just had a down week (6/20-23/2023), I'm not convinced we stay down for long until maybe I see such a pattern appear again with higher lows appearing in VIX/VVIX.
TVC:VIX
by dieseldub
ETH - Long-Term View 👀Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. on DAILY: Left Chart As per my last analysis, ETH rejected the green support zone and traded higher. Now What? 📈 ETH is sitting around a minor resistance zone in gray 1950. For the bulls to remain in control medium-term we need a break above it. Meanwhile, the bears can take over for a correction (to be confirmed on lower timeframes), in this case, we will be looking for new buy setups around the orange minor support. on Weekly: Right Chart 🏹 From a long-term perspective, for the bulls to take over, we need a weekly candle close above the blue resistance zone 2250 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
by TheSignalyst
16
USDJPY - Getting Over-Bought ❗️Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. USDJPY has been overall bullish trading inside the rising broadening wedge pattern in red, however it is currently approaching around the upper trendline. Moreover, the zone 146.0 is a resistance zone. 🏹 So the highlighted purple circle is a strong area to look for sell setups as it is the intersection of the blue resistance and upper red trendline. As per my trading style: As USDJPY approaches the purple circle zone, I will be looking for bearish reversal setups (like a double top pattern, trendline break , and so on...) 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
Short
by TheSignalyst
10
$BTC -Buy Opportunity- Bitcoin is sitting at a good buying opportunity on different perspectives (long-term investing DCA, mid-term bounce- short term craze) ; in the midst of TVC:DXY plunging today Currently trading at Strong Zone of Support : - S/R area - Its Support of Golden Zone of 15K low to 31K High (CHoCH uptrend) -Demand Zone Looking for CRYPTOCAP:TOTAL2 as well to make some moves ( CRYPTOCAP:BTC.D should be surveyed) TRADE SAFE *** NOTE that this is not Financial Advice ! Please do your own research and consult your Financial Advisor before partaking on any trading activity based solely on this Idea .
BINANCE:BTCUSD.P
by Mr_J__fx
ETH - The Bulls Are Strong 💪Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. As per my last ETH analysis, we know that the bulls took over short-term by rejecting the Trio Retest zone. Now What? 🏹 For the bulls to remain in control , and take over from a medium-term perspective, we need a break above the gray zone and upper red trendline. 📈 Meanwhile, the bears can still reject the red trendline acting as a non-horizontal resistance, to form a new swing high before breaking the channel. (to be confirmed on lower timeframes) 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
by TheSignalyst
31
GBPAUD - Looking For Sell Setups ↘️Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. on DAILY: Left Chart GBPAUD is retesting a resistance zone and now sitting around a previous major low in orange so we will be looking for sell setups on lower timeframes. on H1: Right Chart GBPAUD is forming a channel in red and a potential head and shoulders pattern but it is not ready to go yet. For the bears to take over, we need a new swing high to form to complete the head and shoulders and then a momentum candle close below the gray neckline. Meanwhile, until the buy is activated, GBPAUD would be overall bullish and can still trade higher. 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
by TheSignalyst
4
Understanding Market Corrections:Definition & Key ConsiderationsInvesting in the stock market has the potential to generate substantial wealth over the long term, although it comes with inherent risks. One notable obstacle that investors frequently encounter involves safeguarding their capital during periods of declining stock prices. When the market undergoes a downturn, the inclination to panic and sell off investments to evade additional losses can be strong. However, this reactive approach often results in even greater financial setbacks and hinders the ability to capitalize on future market rebounds. In this comprehensive article, we will delve into the concept of a market correction and delve into various strategies that can assist investors in preserving their capital amidst market downturns, enabling them to emerge stronger when the market inevitably recovers. Market Correction: A Comprehensive Explanation In the realm of financial markets, a market correction is a notable event characterized by a substantial decline in the value of a financial instrument. This decline typically ranges between 10% to 20% and can encompass individual stocks of a specific company or even extend to encompass entire market indices comprising a vast array of companies. The duration of a correction can vary significantly, ranging from as short as a single day to as long as a year, with the average duration spanning approximately four months. Market corrections can be triggered by a myriad of factors, each with its own unique catalyst. These factors can range from a company's disappointing financial performance and weak earnings report to more extensive global geopolitical conflicts. In some instances, corrections may occur seemingly without any discernible external cause. It is worth noting that market corrections are not exclusive to stocks alone. They can manifest in various other financial instruments such as commodities like oil, platinum, and grain, as well as currencies, funds, specific industry sectors, or even the entire market as a whole. This exemplifies the widespread impact that a correction can have across diverse segments of the financial landscape. To illustrate the significance of a market correction, let's consider an example from recent history. In the year 2018, the prices of over 500 companies experienced a decline of 10% or more. This widespread correction exemplifies how fluctuations in market conditions can influence a substantial number of companies simultaneously, affecting their valuation and investor sentiment. In conclusion, a market correction denotes a notable decline in the value of financial instruments, with the range typically falling between 10% to 20%. The causes behind these corrections can be diverse and encompass factors ranging from company-specific issues to broader global conflicts. Moreover, corrections can impact various financial instruments and market segments, underscoring their potential for wide-reaching consequences within the financial landscape. Example : AMZN stocks Daily chart showing a correction in 2018 - 2020 Market corrections are not uncommon events within the realm of financial markets. On average, a decline of 10-20% in the stock market transpires approximately once a year. These corrections, characterized by a significant decrease in stock prices, serve as reminders of the inherent volatility and fluctuations present in the market. While corrections of 10-20% occur relatively frequently, more profound market declines exceeding 20% are less frequent, transpiring approximately once every six years. These substantial corrections are often referred to as market collapses, signifying a more severe and prolonged downturn. One illustrative example of a market collapse occurred in response to the global pandemic outbreak in March 2020. The COVID-19 pandemic triggered a swift and severe decline in stock markets worldwide, leading to a precipitous drop of approximately 38% within a matter of days. This extreme correction exemplifies the impact of unforeseen events and external factors on market stability and investor sentiment. It is important to recognize that market corrections and collapses are not solely confined to a particular asset class or geographic region. They can have a broad-ranging effect, transcending national boundaries and impacting various financial instruments, indices, and markets worldwide. In summary, market corrections, defined by significant declines in stock prices, are regular occurrences, transpiring approximately once a year with a magnitude of 10-20%. Market collapses, on the other hand, encompass more profound declines exceeding 20% and typically transpire once every six years. These events serve as reminders of the dynamic nature of financial markets and their vulnerability to various factors, such as the recent pandemic-induced collapse in 2020, which had a profound impact on global markets. Example : SPX500 / US500 stocks Daily chart showing a correction in 2020 Investors who adopt a long-term investment strategy tend to navigate corrections with relative ease, primarily due to their extended investment horizon. By committing their funds for a substantial period, typically ranging from 5 to 10 years, these investors are less likely to be perturbed by temporary price declines. On the other hand, individuals who rely on leverage or engage in short-term trading bear the brunt of corrections, experiencing greater challenges and losses. The impact of a correction can be readily observed by examining the chart depicting the historical performance of any given company. By selecting the annual or five-year chart display, one can identify specific time periods when the asset's value experienced temporary declines. Additionally, it is crucial to consider the decrease in stock price subsequent to the ex-dividend date, commonly referred to as the dividend gap. It is essential to note that the dividend gap phenomenon is distinct from a correction and should be treated as such. What Causes A Correction? A correction in the stock market can be triggered by a multitude of factors and events that impact stock prices. These events can range from speeches given by company executives, investor reports, pandemics, regulatory changes, economic sanctions, natural disasters like hurricanes and floods, man-made disasters, to high-level meetings of world leaders. Even the most stable companies can experience declines in their stock prices due to these events. It is important to recognize that human behavior also plays a significant role in causing market corrections. The stock market is inherently driven by human participation and investor sentiment, which can sometimes lead to corrective actions. For instance, if a popular figure like Elon Musk garners significant attention and support, investors may pour money into his company beyond its actual earnings. Eventually, the overvaluation of such a "hyped" company may result in a decline in its stock price. Furthermore, investors often attempt to follow trends in the market. When a particular stock shows an upward trajectory, more people tend to invest in it, thus increasing its demand and subsequently driving up its price. However, as the price reaches a certain peak, some investors choose to sell their holdings to realize profits. This selling pressure can initiate a correction, causing those who entered the market later to incur losses. Therefore, blindly chasing market trends without careful analysis may prove detrimental. Additionally, corrections can exhibit seasonal patterns. For example, during the summer months, prior to holidays or extended weekends, investor participation in trading may decrease. This reduced trading activity leads to lower liquidity in stocks, creating an opportunity for speculators to exploit the situation. Such periods often witness sharp price fluctuations, potentially resulting in stock prices declining by 10-20%. It is crucial to understand that corrections are a natural part of the market cycle, and it is neither productive nor feasible to fear them indefinitely. The market cannot sustain perpetual growth, and corrections serve as necessary adjustments. By acknowledging their inevitability, investors can adopt strategies that are mindful of market dynamics and position themselves accordingly. How Long Do Corrections Last? Between the years 1980 and 2018, the US markets experienced a total of 37 corrections, characterized by an average drawdown of 15.7%. These corrections typically lasted for approximately four months before the market began to recover. Consider the following scenario: an investor commits $15,000 in January, experiences a loss of $2,355 during the correction, and by May, witnesses their portfolio rebounding to $15,999, based on statistical data. However, it is important to note that outcomes may deviate from this pattern. It is worth noting that the magnitude of a stock's decline directly impacts the duration of its recovery. As an illustration, during the financial crisis of 2008, US stocks tumbled by approximately 50%. The subsequent recovery of the stock market extended over a period of 17 months, primarily attributed to the active support provided by the US government and the Federal Reserve. This underscores the notion that severe market downturns necessitate more prolonged periods for recuperation, even with significant intervention from regulatory bodies. Dow Jones Industrial Average index drop in 2008 The timing of a market correction is often challenging for financiers and experts to predict with certainty. In retrospect, it becomes clear when a correction started, but identifying the precise moment beforehand is a complex task. Taking the aforementioned example of the market collapse in October 2007, it was not officially acknowledged until June 2008. This highlights the inherent difficulty in pinpointing the onset of a correction in real-time. Following a correction, the market's recovery period can vary significantly. In some instances, the market may swiftly regain stability and resume an upward trajectory. However, in other cases, it may take several years for the market to fully recover from a correction. The duration of the recovery depends on a multitude of factors, including the severity of the correction, underlying economic conditions, government interventions, and investor sentiment. Hence, it is crucial to recognize that financiers and market participants can only definitively determine the start and extent of a correction in hindsight. The future behavior of the market after a correction remains uncertain, and it is possible for the market to swiftly recover or take a considerable amount of time to regain stability. How To Predict A Correction Predicting the precise timing, duration, and magnitude of a market correction is inherently unreliable and challenging. There is no foolproof method to accurately forecast when a correction will occur, when it will conclude, or the extent to which asset prices will change. Some economists and analysts attempt to predict market trends by employing various theories. For instance, Ralph Elliott formulated the Elliott Wave Theory, which posits that markets move in repetitive waves. By determining the current phase of the market—whether it is in an upward or downward wave—one could potentially profit. However, if such theories consistently yielded accurate predictions, financial losses during corrections would be virtually nonexistent. It is crucial to acknowledge that market corrections are an inherent and inevitable part of market cycles. While attempting to predict corrections may be enticing, it is important to remember that they will inevitably occur, regardless of how long it has been since the previous one. Relying solely on the absence of a correction for an extended period as a basis for investment decisions warrants careful consideration and analysis rather than being treated as a definitive indicator. Advantages And Disadvantages Of Market Correction Advantages and disadvantages of market corrections can be summarized as follows: Advantages of a market correction: 1) Buying opportunities: Market corrections often present favorable buying opportunities for investors. Lower stock prices allow investors to acquire shares at discounted prices, potentially leading to long-term gains when the market recovers. 2) Rebalancing opportunities: Corrections can prompt investors to rebalance their portfolios. Selling overvalued assets and reinvesting in undervalued ones can help optimize investment returns and maintain a diversified portfolio. 3) Expectation adjustment: Market corrections can serve as a reality check, helping investors reassess their expectations and risk tolerance. This can lead to more informed investment goals and strategies. Disadvantages of a market correction: 1) Financial losses: Market corrections can result in substantial losses, particularly for investors who panic and sell their investments at lower prices. Reacting emotionally to market downturns may amplify the negative impact on portfolios. 2) Economic implications: Market corrections can have broader economic repercussions. They may lead to job losses, reduced consumer spending, and slower economic growth, potentially affecting industries and sectors beyond the financial markets. 3) Psychological impact: Market corrections can trigger fear, uncertainty, and anxiety among investors. These emotions may drive impulsive decision-making, such as selling investments hastily or hesitating to re-enter the market when conditions improve. It is important for investors to carefully evaluate the potential advantages and disadvantages of market corrections and consider their own risk tolerance, investment goals, and long-term strategies when navigating such market events. What Should You Do During A Correction? Correction can make an investor richer or poorer or have no effect at all. The impact of a market correction on an investor's wealth depends on their actions and decisions during that period. It is impossible to predict with certainty the duration or direction of asset value changes during a correction. However, there are general tips that can help investors navigate through a correction and potentially safeguard their finances: 1) Maintain a calm and rational mindset: During a correction, it is crucial to approach investment decisions with a cool head. Instead of making impulsive moves, take the time to understand the underlying causes of the correction and consider expert opinions and news. 2) Avoid excessive borrowing: It is advisable not to use borrowed money for investments, especially during a correction. This reduces the risk of incurring debts and potential losses. For beginners, it is often recommended to limit investments to the funds available in their brokerage accounts, particularly during a correction. 3) Assess company fundamentals: Evaluate the fundamental strength of a company by analyzing key metrics and ratios. Comparing a company's value with others in the same industry can provide insights. If a company is not overvalued, it may indicate that there is no fundamental reason for a correction, and its value may likely recover in due course. 4) View the correction as a buying opportunity: Prominent investors like Warren Buffett and Nathan Rothschild have emphasized that corrections present excellent opportunities for investment. If a stock's price has fallen, consider purchasing it based on the company's performance rather than solely focusing on the size of the discount. Maintaining some savings in cash allows for timely investments in undervalued assets. 5) Acknowledge the normalcy of corrections: It is important to recognize that corrections are a regular part of market cycles and serve as tests of an investor's composure. Following an investment strategy that includes provisions for investing during periods of 10-20% lower stock prices can help protect savings and optimize long-term returns. By adhering to these general tips and maintaining a disciplined investment strategy, investors can better navigate market corrections and potentially preserve and enhance their financial well-being. Conclusion In summary, market corrections are an intrinsic aspect of the stock market's ebb and flow, and it is essential for investors to anticipate and navigate them effectively. During such periods, the inclination to succumb to panic and hastily sell investments can be strong. However, maintaining composure and adhering to prudent strategies that safeguard capital are crucial for weathering corrections and emerging stronger when the market inevitably rebounds. While corrections present challenges, they also offer advantageous opportunities, such as the ability to acquire stocks at discounted prices. Conversely, the potential for substantial losses exists, emphasizing the importance of a measured approach. A long-term investment strategy, rooted in sound analysis rather than reactionary emotions, serves as a vital compass for surviving corrections. By focusing on the broader picture and resisting the temptation of short-term market fluctuations, investors can position themselves for long-term success amidst the natural ebb and flow of the market.
NASDAQ:TSLAEducation
by FOREXN1
12
SasanSeifi 💁‍♂️ETH/USDT 👉1D 🔻 1570$/ 1446$ After correcting 15% from the price range of 1900, now the price is trading in the range of 1737. In the long term, the possibility of further price correction can be considered. Considering the failure of the 1740 price support range, in my opinion, the price will face further correction from the important resistance areas of 1790 and 1842 after the pullback and liquidity collection if selling is confirmed In case of a positive fluctuation, to better understand the continuation of the trend, We have to see how the price will react to the resistance ranges. Otherwise, if the price is above the stabilization resistance range, it may be associated with further growth. Possible trends are identified. ❎ (DYOR)...⚠️⚜️ What do you think about this analysis? I will be glad to know your idea 🙂✌️ IF you like my analysis please LIKE and comment 🙏✌️
Short
by SasanSeifi
ETH - Long Story Long 📘Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. As per my last ETH analysis (attached on the chart), we were looking for short-term buy setups around the Trio Retest circle in purple. ETH rejected our zone and trading higher. Now What? 🏹 For the bulls to remain in control, and take over from a medium-term perspective, we need a third swing high to form around the upper red trendline and then a break above it (as highlighted on the chart) 📈 The bulls are clearly pushing and will remain in control UNLESS ETH breaks below the green support 1650 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
by TheSignalyst
19
CADCHF - Looking For Sell Setups ↘️Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. CADCHF is overall bearish trading inside the falling broadening wedge pattern in red, and it is currently sitting around the upper trendline. Moreover, the zone 0.68 is a resistance zone. 🏹 So the highlighted purple circle is a strong area to look for sell setups as it is the intersection of the blue resistance and upper red trendline. As per my trading style: As CADCHF approaches the purple circle zone, I will be looking for bearish reversal setups (like a double top pattern, trendline break , and so on...) 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
Short
by TheSignalyst
5
BTC - Trio Retest 3️⃣Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. I find the daily chart for BTC to be interesting as it appears to be forming one of my favorite patterns. What I call TRIO RETEST Here is why the purple circle is a strong zone to keep an eye on: 1 => Overall Trend BTC has been bullish medium-term trading inside the rising broadening wedge in blue and now approaching the lower blue bound / trendline acting as a non-horizontal support. 2 => Demand Zone The green zone is a previous resistance turned into support and a Demand Zone. 3 => Oversold Zone BTC is bearish short-term trading inside the falling channel in orange and now approaching the lower orange trendline which I consider an oversold zone. As per my trading style: As BTC is sitting around the purple circle zone, I will be looking for bullish reversal setups (like a double bottom pattern, trendline break, and so on...) 📚 Hope you find this post useful. It's important to always adhere to your trading plan, including entry points, risk management strategies, and trade management techniques. All Strategies Are Good; If Managed Properly! ~Richard Disclaimer: The information provided is for educational and informational purposes only and should not be considered as financial advice. It is important to do your own research and make informed decisions before entering any trades. Past performance is not indicative of future results. Always be aware of the potential for losses, and never risk more than you can afford to lose.
by TheSignalyst
27
RNDRing a Bullish Impulse 💻Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. RNDR has been overall bullish trading inside the rising wedge pattern in green, and we are currently in a correction phase approaching the lower green trendline. Moreover, the zone 1.60 is a support zone. 🏹 So the highlighted purple circle is a strong area to look for buy setups as it is the intersection of the blue support and lower green trendline. As per my trading style: As RNDR is sitting around the purple circle zone, I will be looking for bullish reversal setups (like a double bottom pattern, trendline break , and so on...) 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
RLong
by TheSignalyst
10
GBPNZD - Looking For Sell Setups ↘️Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. on DAILY: Left Chart GBPCHF has been stuck inside a big range and it is currently sitting around the upper bound so we will be looking for sell setups on lower timeframes. on H1: Right Chart GBPNZD is forming a wedge pattern in red but it is not ready to go yet. For the bears to take over, we need a momentum candle close below the last major low in gray. Meanwhile, until the buy is activated, GBPCHF would be overall bullish and can still break the resistance upward. 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
Short
by TheSignalyst
5
FLOKIUSDTFloki Inu (FLOKI) is an ERC-20 token based on the Ethereum blockchain. It is named after Elon Musk's dog, a Shiba Inu. However, the white paper specifically states that this is not a meme, but a movement. Floki Inu is also partnering with CryptoCart, enabling its holders to purchase items from over 1,700 stores through its partnership with CryptoCart (CC). It is also working on a similar partnership with Curate (XCUR) that will allow Floki tokens to be used as a payment method in the Curate physical goods marketplace. 1st target for middle holders.
Long
by almatradebusiness
GBPNZD - Looking For Sell Setups ↘️Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst. on WEEKLY: Left Chart GBPNZD is sitting around a strong weekly resistance in green, so we will be looking for sell setups on lower timeframes. on H4: Right Chart GBPNZD has been overall bearish trading inside the red channel and it is currently sitting around the upper trendline. 🏹 So the highlighted purple circle is a strong area to look for sell setups as it is the intersection of the green resistance and upper red trendline. As per my trading style: As GBPNZD is sitting around the purple circle zone, I will be looking for bearish reversal setups (like a double top pattern, trendline break , and so on...) 📚 Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
by TheSignalyst
1
SPY Plan 2023-2026This is my Funnel setup for the run up. Im watching the 443 range now to the 448 trap. If theres volume at ths price point we are gonna keep an eye on breaking out of 453 to retest 458-463 range where I see we will see some sell offs. But there is a continuation to watch for for a new ATH if we break and maintain the 450 range Im watching the 473 481 489 493 503 513 top ranges if we do break in this next few years. 2024 we must be above 460s to be good for this projection
AMEX:SPY
by EMC2PRoPheT