VVIX trade ideas
The Godfather is primedMy past posts should show a bit of the outlook I expect over the course of the next 3 weeks. I will say I did not expect the violent rally into the end of last week, but like all good traders should know, nothing is ever certain with the markets. I still believe price will visit 3680 (or at the very least 3848) before we see above 4100. there is nothing but good news regarding the markets and outlook of the country right now. In other words...complacency. Now sentiment alone is not something to trade off of, but now that my VVIX trend has broken down for the first time in over a year, I can fully say I believe this pullback will happen swiftly and violently, and the bounce will likely be very violent as well. there is a window of weakness currently and watch DXY and USDJPY closely to see which shows their hand first. Nothing is ever a guarantee, but it is time to load the rifle and take a shot here. Study up and sell the rip monday, even if big daddy Powell speaks this week, there isn't much he can say to pump this glutton of a market. As always do your own research and be ready to adapt to whatever this week brings. Even with my shot being loaded here, there is no guarantee of anything going my way in the weeks to come. Traders adapt. Be smart, trust price, and enjoy it. Cheers.
The Godfather rechargesIn this edition of who is getting hammered, its the Godfather himself. As I'm sure you've realized, DO NOT long VXX or UVXY at the highs...they are intrinsically designed to go down and kill the majority of traders who try and greedily make fast money. In all my past posts, we have witnessed the sleeping giant, base, chop, and create inductions. Finally 2 weeks ago we were rewarded for our patience at the support. Hopefully the post 3 weeks ago prepared you for that spike because in volatility, when its over; its over. Now that we have established that anyone who doubled down over last friday's VIX pop was borderline crazy, hopefully this week you can remember to relax and let VVIX get some sleep. When I say sleep I want you to realize that support and liquidity are relative terms when charting volatility. This territory is difficult and often disheartening to those who think VVIX or VIX can be charted with normal TA, it can't. All the tools we use elsewhere have a smaller place in figuring out trend for volatility. Liquidity, commodities, DXY, OIL, even Crypto has its place when watching sentiment, liquidity, and trend. you cannot directly trade the VIX or VVIX, but understanding how it leads tools such as UVXY and VXX is the key to becoming a volatility trader. While I have appreciated all the comments and messages, I am in no way an expert or an authority on "volatility" but merely a student, as we all should be.
I genuinely hope many of you read this all, simply because after 10 years of trading and watching my account be blown up trading with a bias, I have learned to trade without bias and treating trading for what it is: a business transaction. Simply buy, sell, or hold. Its as simple as that.
Now for the Meat:
SPX recovered over 4% this week after dropping 3% the week prior, not surprisingly this move was done on a decrease of volume. The "pump" has become weaker as more and more people dive headfirst into the market (RIP WSB/ Melvin Capital) with no regard that stocks will always recover dips. To that point, its been that way for almost a year now and with the final pump of stimulus coming, the market may indeed see 4000. crazy to think we would be here, but we cannot stress over what should or shouldn't be. Be a fool, trust price. Right now as it stands VVIX will push to the bottom support which currently is between 99.50 and 100.75. This lines up with a recharge for volatility as it was crushed back to the levels it was prior to the peak, however do NOT be tempted to buy this initial dip in VIX or VVIX. Instead wait for a bottom to chop and retest the 200 ema here. Should the 50-200 cross I will update the changes that may bring, however that has yet to happen. Should we break below the support I believe VVIX will find, things make get crazy and SPX may find 4200 fast. this would be an ideal situation because we will be ready to load shorts and volatility. for now? stay away or play individuals smartly. As always trade smart, emotionless, and please FOLLOW PRICE. Expect zero on every trade. Only YOU know your own risk. Cheers.
The Godfather is readyIts been a slow push sideways amidst a few inductions, but the table is open from here until mid April for a potential explosion. WTI Crude was one of my first clues over the weekend it touched right near 57.35 before stabilizing near 60.3 now. Along with the relentless push of DXY, there is a real chance for a massive correction. If DXY stays over 92.5 on the weekly close, it can hit 94 very fast. My initial pullback target would be near 3680 in SPX before I would be fully ready to buy heavily into tech for a massive push to 4100+. There is a false narrative still alive with "BTFD" and while over time stocks will grow, this chop in the first 4 months of the year have shown that people are relying heavily on this and will continue to buy wherever the market takes this. THIS is not healthy. Many investors will be eliminated completely in the times to come, but for now? enjoy this pullback by PREPARING for it. stop gambling on every new SPAC that comes out, do your own DD and always hold a reserve of cash to buy the lower prices coming soon courtesy of VVIX. Watch the signs of price action and the inevitable news about the middle east or tightening interests rates back home. These things will be the precursor of what is to come. As always be smart, patient, trade with your head not your heart, and ALWAYS trust price above all else. goodluck. Cheers.
Could it be?This is short and sweet, but while everyone is enamored over SPX finding a new high, it seems they have forgotten that it has gone no where. Here we stand after 4 straight green days of VVIX, to find ourselves in the top of our little box in the chart. More importantly, above the 50/200 ema and the Middle Bollinger. AS WELL as breaking the RSI trend to the bullish side AND keeping the momentum of our friendly MACD. now all of this sounds very convenient to our cause with VVIX, however as I watched the late day push of DXY and the insanity of Bitcoin over the weekend, this market may be ready to correct 100+ points, and as insignificant as that may seem, it presents another golden opportunity before march 6. Best of luck. Cheers. trade emotionless and trust PRICE.
The Godfather prepares the sell COMES. None of this rally has quelled the underlying fear in the market. It does not have the power, nor the sentiment that the majority of traders think it does. After the steady grind over 3750, SPX has been diminishing in strength as it goes up. Volume has silently tapered off and liquidity is near empty after the last push today. I am now beginning the accumulation of Volatility and Puts out 4-6 weeks, which is the longest I can see this grind up going. that does potentially give SPX the room for 3910, however that chance is smaller by the day. Do not be fooled with the ramps going into close most days this week. As we watch the changing of guard in the political realm, understand that there will be fireworks and things unseen.
In technical terms we have seen VIX, VXX, UVXY, and VVIX himself, hold the support each time it is tested. Even after a torrent rally today, DXY and VVIX have remained elevated. Don't be alarmed to see VVIX below 110, however if breaks 100 be ready to fully position yourself long. Time will tell, but the next 30 days should be fun. best of luck. Cheers.
Liquidation event likely (LTCM part 2)Vix nearing a liquidation event due to force selling to meet obligations from the Mother Of All Bets (GME). Funds are liquidating longs and fleeing to cash. Since the float of GME is upside down, they will have to settle with holders to satisfy contractual obligations. This is very similar to long term capital management back in the day. The question is will the fed bail them out via the repo market?
The Godfather stands stillWhile there has been a continuous rise in stocks to ATH almost daily, the power of volatility has been brewing. There is very little upside remaining in SPX (ES1!) IMO. the risk for 1%-4% more may not be worth the 10%-20% correction that is coming very soon. There will be a limit down day very soon, that is not an opinion but a very very likely situation. many will not be aware of this or prepared for it when it happens. As always trade smart, emotionless, and follow price. I have admired watching this run since march, however I have been out of most of personal longs since august. I have traded swings since then and allow my work here to guide others for the coming storm. Cheers.
The Godfather of VolatilityWell well well, in the last 6 weeks we have seen the break down of this wedge and a push towards the initial target, which was met by a vicious suppression of volatility into the US Election. Now the second target has been labeled and mapped out. I have labeled those zones as key pivots should we see Volatility explode over the next 6 weeks into the Presidential Inauguration, however the timeline will be messy with the continued effort of CB's and the Fed to burn all the Bears and further prevent anyone from cashing in on a second crash this year. The likelihood of them being able to continue this? Very low, however no one can say what they won't attempt to do to push up price even higher and killing volatility. As traders, all we can do is watch what price and the numbers tell us, and they tell us the concentrated effort to hold up the economy is running out of fuel. The chickens will come home to roost soon, nor the Fed or all the Governments in the world will be able to stop this. Pay key attention to DXY and ES1! over the coming days as I expect to see a Dollar push to margin call traders in ES1!. and do remember VVIX is the head of the holy trinity of UVXY, VIX, and VXX. VIX is the son of VVIX and will follow the trend he sets. VXX and UVXY get their orders from VVIX and they will do his bidding in due time. Key to remember is that so many factors play into the rise and fall of volatility and that many of our trends and indicators do not account for all of these things simultaneously and leave us early or late on trades with volatility (which im sure you know kills your cash), so please be vigilant and trade smartly, not emotianally. best of luck.
[VVIX] Still Lookin for that 3rd HH PEAK.. Volatility Incoming? Well that OG Falling Wedge played out nicely B).
I've updated it here to line up this most recent spike. We're at the bottom of the main 2Y upchannel containing the bulk of the Price Action (yellow) so could very easily bounce back up from here.
Currently we still seem to be within the FW structure heading toward the tip for a bigger breakout. We could breakout again before reaching the tip though as a continuation from the main FW upward break.
Here's my more recent OG Idea:
Here's the OOG post... so far we've only had 2 of the predicted three HH spikes so last one still probably incoming here...
The Mother of Volatility (VVIX)VVIX is the mother of volatility. It's already elevated, the initial shock and awe stage is done. SPX has to go down from here (which equates to more shock, awe and disbelief) for VVIX to rise substantially and for VIX futures & VIX options to behave accordingly.
Expecting a pullback (similar to my last $VIX chart) before rocketing much higher (March levels).
Keep in mind that the VIX futures curve shifted downwards yesterday while still maintaining backwardation (that's why $UVXY was down so much). Historical volatility is 18, now it's 38. If SPX rises, this will trigger the long vol guys who didn't position long vol.
