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VXX

SP500 Christmas Time2HR Chart At this point I do not believe that we will get a sell off before the end of the year. I know that usually happens for tax purposes but I have an alternative theory. I think a lot of people will not sell until after the 1st due to not wanting to have Obamas high tax rate affect them versus Trumps tax cuts next year. I think it will be difficult to get past the 2285 area as I just don't think it will break above the long term channel line. Tomorrow may show us the way as it appears we are in an ABCDE bull pennant. And the way it is set up suggests that the break out of that pennant will be a short lived push up. I am not sure about the holiday trading days but I will be trying to figure out a good entry for a short term trade on the VIX.
TVC:SPX
by SalN
1
SHORT VIX DERIVATIVE PLAYS: GIVE THEM TIME TO WORK OUTAn interesting article on shorting the VIX and VIX derivatives: www.marketwatch.com In a nutshell, backwardation occurs (which only applies to VIX derivatives, not to the VIX itself) and this can "derail" a short VIX derivative play that is not given enough time to play out and for contango to kick in and start its inevitable erosion of the underlying, whether it be VXX, UVXY, XIV (inverse), or SVXY (inverse). And although this only shows contango/backwardation for the years 2007-2012, one theme is evident and that is that the market is in contango the vast majority of the time (on average, >75% of the time): www.cboeoptionshub.com In essence, then, the caveat to shorting VIX derivatives in reliance on contango being a constant on top of VIX mean reversion really should be a caveat against shorting and assuming that it will work out "immediately" or even "fairly quickly" (relative terms, I know). The practical crux of this is that if you short VXX* during a VIX >20 spike with, for example, a short call vertical, and it doesn't break your short call as you approach expiry, well, roll it out for duration to a later expiry and give it more time to work out. After all, history says that for >75% of the time, contango will be on your side, even if you have to wait a little longer than you'd like for it to have the desired effect ... . * -- Alternative plays would be to short UVXY with a short call vert, long SVXY with a long put vert (it's an inverse), or go long XIV (it's not optionable; you'll just be stuck with stock). With XIV, since you'll be holding long stock, you're only option is to "wait it out."
CBOE:VXX
by NaughtyPines
SP500 SPX TVIX Rate Hike ThoughtsTVIX Daily Chart SO I decided to start off with the TVIX chart. I measured the price movement of TVIX during the last rate hike which equaled out to approx. 150% which I measured on this chart from a starting price of $10. Then I measured the flash crash that occurred before that which equaled 250% which I posted. Some interesting things (maybe wishful thinking). The Fed still raised rates a quarter percent even after that flash crash. The difference this coming week is that we are in rocket ship mode in the stock market. My hope is that the Fed says to itself, here is our chance to do a half point rate hike. That would be a bit of a surprise for the markets and then maybe just maybe we can reach the 200DMA for the TVIX chart which as you can see would also be near that 250% move. The other thing I posted on this chart is a yellow circle that says "Approx target for the weekly BBand head poke". I will post the weekly for TVIX after this and show you the two head pokes above the BBands for both the flash crash and last years rate hike. SO I thought that is significant enough to through that on this daily chart of where I think that head poke range would be is there happened to be any consistency in that regard. And no, I do not think we can possibly reach the 50MA for the weekly. Just a dream.
TLong
by SalN
SP500 Italy Vote WeekendNothing too difficult here. I think that Italy will vote to leave the EU and we will have a little correction. BUT, I just don't think it will be that great. I am aiming for the blue box. In other words, a retracement to the 38% to 50% then bounce right before the rate hike. I do not think this vote will be as great as the Brexit because it appears to have been talked about sooo much that it is partially priced in, IMO. I bought into TVIX for a short pop. I will post the chart as I see this playing out.
TVC:SPXShort
by SalN
TRADE IDEA: VXX DEC 16TH 37/40 SHORT CALL VERTICALA short volatility trade here on the notion that VIX reverts to its mean in fairly short order post-election ... . Metrics: Probability of Profit: 57% Max Profit: $105/contract Max Loss/Buying Power Effect: $195/contract Break Even: 38.05 Notes: This, in all likelihood, will require adjustment at open so that the break even is at or near current price. Look to set it up with the break even at current price and so that you obtain at least one-third the width of the spread in credit (in this case, $100 or more). Look to manage at 50% max profit.
CBOE:VXXShort
by NaughtyPines
S&P 500 and possible VIX play4 hour chart for S&P 500 So as promised, here is my take on the S&P 500 and where I see things moving in the next two months. I feel very confident that we have just completed the 4th corrective wave of this 5 wave impulse. As you can see, this 4th wave is shallow and complicated. And the 2nd wave (Brexit) is deep and cleaner. So all that is left is the 5th wave. I placed OI options price targets in the chart. I also measured what 50% and 75% gain of the 3rd wave would take us as far as the 5th wave is concerned. For the 50% growth price target, we would reach 2215-2216. For the 75% growth price target, we would reach 2240. However, price action will dictate the final outcome. I also measured the amount of time in days and bars for wave 3. So what my analysis is pointing to, and what I am leaning towards, is a micro 5 wave growth, topping around the 2215 range (red line). I just don’t think we go much higher because it seems too steep for those OI price targets. Either way, it appears that we will make all time highs. (blue line signifies the last high) ATH’s will help solidify the Feds decision to raise rates as they would not raise rates if the market showed weakness like it has this last couple weeks. It appears we top around the end of November and start a steep ABC correction, with C being the big one that would coincide with the Interest Rate hike. Unless we get a black swan event that triggers this fall (doubtful) I am pretty sure they raise rates in December. So I will be playing the VIX at the end of November. If anything changes then I will update this post. And just to touch on Yellens latest comments. Of course she and others are going to start to be Dovish. They want the market to go up so they can raise rates. Talking like she is uncertain is BS and helps kick start this 5th wave. So there it is, short and sweet. Hope you like it and hope it is helpful.
TVC:SPXLong
by SalN
7