$VIX bounced off my support trendline from Dec. It's nice to see the lines working so well. Now we just need UVIX/UVXY to start climbing too. I still have a 30% position in UVIX and 27% in SOXS. UVIX would be a buy today due to the break of the daily downtrend. I would like to see VIX break above 20 and 50 day MA at 13.83 to confirm the next rally.
$VIX closed the last 4 days above both 20 and 50 day moving averages. I noted Monday I would like to see a VIX break above, and that is where we are now. I sold Tuesday and re-bought a smaller position today. This is about as high probability setup you can get. But most of my money is in SOXS as I have a better understanding of how to trade it. There may be a way to trade SVIX/UVIX as a combo pair, but SVIX has the -100% overnight risk.
I would say there's no -100% overnight risk with SVIX anymore. It's like -$40/barrel oil, it was a one off event, and you could see both coming long in advance. Nobody really expected it to happen, but the possibility was plain as day.
Last night I was talking to my dad and I showed him how easy the UVXY trade was at the moment, simply buy early and sit on it most of the day to a possible top then sell. That way, you're in all day for a possible pop with a market drop. If the market continues to move up, with VIX moving up with it, then you're totally safe with UVXY or UVIX. With SOXS or SQQQ, they are falling with the markets moving up, so you can't sit in them. If the markets continue up, SOXS and SQQQ will continue to fall and VIX is holding up. If the markets drop sharply, you have to get in quickly with SOXS and SQQQ, but you're already in with UVXY and sitting on a small cushion. It's been a remarkably easy trade the past 4 days, and gave over 10% today.
VIX is definitely still in a slight uptrend, despite SPY at ATH. I'm not sure if this is much to worry about. Looking at 2021, VIX had an uptrend for 6 months before the market topped. But we really just want to know when is VIX going to spike. I think we will get a spike in a couple weeks. I'm watching for VIX to bounce from 12.50 or so. Or if it rises > 14.50 before dropping < 13, I think we'll get a spike that can be traded with UVXY.
On the UVXY daily chart, I am drawing a downtrend for the last 3 days and also have the 20 day MA plotted currently at 8.52. I may set a buy stop for UVXY at 8.60, but I'd like to wait a few days.
I would say that VIX is in a slight uptrend, because SPY is at ATH. It makes sense, right? Everyone's nervous and wondering if it will hold. A stop at 8.60 is 8% above today's close of 7.96. That's a lot to give up, especially when there's some clear support to watch. I'll be watching to buy early from the open if it holds and moves up, especially if it opens lower than today's close. A look back to Jan. 2018 might shed some light on things as well.
UVXY is neatly staying below the resistance trendline since 21DEC2023. Using the daily candlestick chart, draw a line from the peak price on 21DEC, and touching peak price on 03JAN2024, 04JAN and 05JAN. That should put resistance around 7.85 for Tuesday.
But is fear coming back in the market and is SPY losing momentum? I don't see fear on the CNN fear and greed index. We are still in a bull trend with higher highs and higher lows. This past week SPY closed right at the previous high so there won't be a lower high.
In a bull trend the way to spot weakness is a break of a support trendline. On 20DEC we broke a trendline, but it was a very steep line that is not expected to remain as a primary trend. A more realistic trend line is from 14NOV, touching the low from 06DEC and nearly touching 05JAN low. Until that trend breaks, I believe any UVXY moves will be muted to <10%.
If UVXY gaps up over its resistance Tuesday or Wed, I will not be buying yet.
UVXY also started a small uptrend line through the early and later higher low on Jan.11. I quite like these muted moves of <10%. They're easy to grab early in the day and hold till it runs out of momentum for roughly 6 and 3% Thurs. and Friday.
For SPX, I have it holding the near vertical trendline till Dec.29. In a daily view, it runs through the lows starting Fri. Oct. 27, Mon., Tues. Oct.31, hit it again on Dec.6 red candle, held, touched the next 4 days green, higher lows and highs, then the same again Dec.20 big red to touch the line, next 5 days riding the line with higher lows and highs. I said farewell to TQQQ on the last day, Dec. 28 and would have done the same for SPY.
Moving out to an hourly view, from the blast higher at 2pm Dec.13, it roughly held a parallel trendline higher, especially starting Dec.18. The hard break at 2pm on Dec.20 was a sell for me with SOXL and TQQQ, and I gambled re-buying late in the day suspecting it was a bogus move created by traders during the lighter holiday period. With SPX holding a hard ceiling on Dec.28, it made sense to sell, as it did with SOXL and TQQQ.
Now there's a parallel trendline for SPX on the hourly chart through the late low Jan.5 and mid-day low Jan.11. As with TQQQ/QQQ, SPY was a buy at the open on Jan.8 and still holding. Active traders could have sold and re-bought Jan.11.
I put a more reasonable SPX trendline through the Jan.5 low, back through the Dec.12 and Nov.29 highs, giving resistance for an extended period, and back through the lows on Aug. 25 and 18. You can then extend that line on the weekly chart all the way back to 2022. That gives it a lot of credibility.
As I commented I did not buy the UVXY gap up, and I see that it reversed within 30 minutes and would have stopped me out anyways. This could be the start of an up trend if it stays above 8.00. But there's no reason to buy a large position unless SPY breaks support, currently aroun 470-471. I think your trend thru 05JAN and 11JAN was broken today. I would recommend the trend from 14NOV, 06DEC, 05JAN lows as the support that needs to hold this week.
Perhaps you want to try my strategy. My steeper SPX trendline through the late low Jan.5 and mid-day low Jan.11 was broken at the open and UVXY was up. That's a great signal to be ready to buy UVXY. From the early low of 8.05 to the 10am high of 8.41 is 4.5%. Selling early or on a stop as falling at 8.30 was 3.1%. Even a loose stop at 8.25 was 2.5%. SPX turned up sharply after 20 minutes, so tightening up on UVXY would have made sense.
At 11:00 and 11:30, UVXY was again a speculative buy and I bought the early chance at 8.00. I was early selling at 8.35, down from .40, since I didn't think there was going to be a significant market drop, and I didn't want to watch it closely. I had sold my leveraged longs and welcomed a chance to buy them back cheaper. Selling late in the day at 8.35 for 4.4% was a better call.
That was two 'easy' trades for 3-4%, and no reason not to take a full position. I like such days since I'm not concerned about a sudden hard drop in UVXY from the lows. Buying at 8.00 with a stop at 7.90 (-1.3%) is comfortable, and getting stopped out simply sets you up to buy at 8.00 or lower on a move up.
I think I could have got the 2.5% if I was expecting to day trade and looking for 2-4% per trade. Otherwise, the main reason for UVXY is we are looking for 10% or more (hopefully 50%) on a 2-3 day spike, so we should be keeping stops loose at breakeven for the most part, especially while I'm at work and not day trading. You seem to have a good handle on KOLD and UVXY quick day trades, so no reason to take on more risk. Plus with a couple wins, you could have held in case of a pop at the open tomorrow. Gives you some flexibility. So the quick day trades are the best route if you get it right.
For now, UVXY and KOLD/UNG are best as day trades. Once we get winter out of the way, then there will be less risk of a surprise gap move up in NG. I don't expect a big down move in the markets so UVXY will likely remain muted, but with day trade opportunities.
Today was similar to yesterday for UVXY. Could have bought at the open and sold in 30 minutes for about 3%. Something I noticed though, when SPY made a lower low in the after noon, UVXY made a lower high. VIX was like a double top.
On the daily chart VIX paints a disturbing picture for the markets, making a higher low on 27DEC, then a double bottom on 11JAN. SPY held the support I mentioned at 471, so this could blow over. But I will be out of my SOXL if things head south tomorrow.
$VIX bounced off my support trendline from Dec. It's nice to see the lines working so well. Now we just need UVIX/UVXY to start climbing too. I still have a 30% position in UVIX and 27% in SOXS. UVIX would be a buy today due to the break of the daily downtrend. I would like to see VIX break above 20 and 50 day MA at 13.83 to confirm the next rally.
$VIX closed the last 4 days above both 20 and 50 day moving averages. I noted Monday I would like to see a VIX break above, and that is where we are now. I sold Tuesday and re-bought a smaller position today. This is about as high probability setup you can get. But most of my money is in SOXS as I have a better understanding of how to trade it. There may be a way to trade SVIX/UVIX as a combo pair, but SVIX has the -100% overnight risk.
I would say there's no -100% overnight risk with SVIX anymore. It's like -$40/barrel oil, it was a one off event, and you could see both coming long in advance. Nobody really expected it to happen, but the possibility was plain as day.
Last night I was talking to my dad and I showed him how easy the UVXY trade was at the moment, simply buy early and sit on it most of the day to a possible top then sell. That way, you're in all day for a possible pop with a market drop. If the market continues to move up, with VIX moving up with it, then you're totally safe with UVXY or UVIX. With SOXS or SQQQ, they are falling with the markets moving up, so you can't sit in them. If the markets continue up, SOXS and SQQQ will continue to fall and VIX is holding up. If the markets drop sharply, you have to get in quickly with SOXS and SQQQ, but you're already in with UVXY and sitting on a small cushion. It's been a remarkably easy trade the past 4 days, and gave over 10% today.
Starting a new comment thread.
VIX is definitely still in a slight uptrend, despite SPY at ATH. I'm not sure if this is much to worry about. Looking at 2021, VIX had an uptrend for 6 months before the market topped. But we really just want to know when is VIX going to spike. I think we will get a spike in a couple weeks. I'm watching for VIX to bounce from 12.50 or so. Or if it rises > 14.50 before dropping < 13, I think we'll get a spike that can be traded with UVXY.
On the UVXY daily chart, I am drawing a downtrend for the last 3 days and also have the 20 day MA plotted currently at 8.52. I may set a buy stop for UVXY at 8.60, but I'd like to wait a few days.
I would say that VIX is in a slight uptrend, because SPY is at ATH. It makes sense, right? Everyone's nervous and wondering if it will hold. A stop at 8.60 is 8% above today's close of 7.96. That's a lot to give up, especially when there's some clear support to watch. I'll be watching to buy early from the open if it holds and moves up, especially if it opens lower than today's close. A look back to Jan. 2018 might shed some light on things as well.
UVXY is neatly staying below the resistance trendline since 21DEC2023. Using the daily candlestick chart, draw a line from the peak price on 21DEC, and touching peak price on 03JAN2024, 04JAN and 05JAN. That should put resistance around 7.85 for Tuesday.
But is fear coming back in the market and is SPY losing momentum? I don't see fear on the CNN fear and greed index. We are still in a bull trend with higher highs and higher lows. This past week SPY closed right at the previous high so there won't be a lower high.
In a bull trend the way to spot weakness is a break of a support trendline. On 20DEC we broke a trendline, but it was a very steep line that is not expected to remain as a primary trend. A more realistic trend line is from 14NOV, touching the low from 06DEC and nearly touching 05JAN low. Until that trend breaks, I believe any UVXY moves will be muted to <10%.
If UVXY gaps up over its resistance Tuesday or Wed, I will not be buying yet.
UVXY also started a small uptrend line through the early and later higher low on Jan.11. I quite like these muted moves of <10%. They're easy to grab early in the day and hold till it runs out of momentum for roughly 6 and 3% Thurs. and Friday.
For SPX, I have it holding the near vertical trendline till Dec.29. In a daily view, it runs through the lows starting Fri. Oct. 27, Mon., Tues. Oct.31, hit it again on Dec.6 red candle, held, touched the next 4 days green, higher lows and highs, then the same again Dec.20 big red to touch the line, next 5 days riding the line with higher lows and highs. I said farewell to TQQQ on the last day, Dec. 28 and would have done the same for SPY.
Moving out to an hourly view, from the blast higher at 2pm Dec.13, it roughly held a parallel trendline higher, especially starting Dec.18. The hard break at 2pm on Dec.20 was a sell for me with SOXL and TQQQ, and I gambled re-buying late in the day suspecting it was a bogus move created by traders during the lighter holiday period. With SPX holding a hard ceiling on Dec.28, it made sense to sell, as it did with SOXL and TQQQ.
Now there's a parallel trendline for SPX on the hourly chart through the late low Jan.5 and mid-day low Jan.11. As with TQQQ/QQQ, SPY was a buy at the open on Jan.8 and still holding. Active traders could have sold and re-bought Jan.11.
I put a more reasonable SPX trendline through the Jan.5 low, back through the Dec.12 and Nov.29 highs, giving resistance for an extended period, and back through the lows on Aug. 25 and 18. You can then extend that line on the weekly chart all the way back to 2022. That gives it a lot of credibility.
As I commented I did not buy the UVXY gap up, and I see that it reversed within 30 minutes and would have stopped me out anyways. This could be the start of an up trend if it stays above 8.00. But there's no reason to buy a large position unless SPY breaks support, currently aroun 470-471. I think your trend thru 05JAN and 11JAN was broken today. I would recommend the trend from 14NOV, 06DEC, 05JAN lows as the support that needs to hold this week.
Perhaps you want to try my strategy. My steeper SPX trendline through the late low Jan.5 and mid-day low Jan.11 was broken at the open and UVXY was up. That's a great signal to be ready to buy UVXY. From the early low of 8.05 to the 10am high of 8.41 is 4.5%. Selling early or on a stop as falling at 8.30 was 3.1%. Even a loose stop at 8.25 was 2.5%. SPX turned up sharply after 20 minutes, so tightening up on UVXY would have made sense.
At 11:00 and 11:30, UVXY was again a speculative buy and I bought the early chance at 8.00. I was early selling at 8.35, down from .40, since I didn't think there was going to be a significant market drop, and I didn't want to watch it closely. I had sold my leveraged longs and welcomed a chance to buy them back cheaper. Selling late in the day at 8.35 for 4.4% was a better call.
That was two 'easy' trades for 3-4%, and no reason not to take a full position. I like such days since I'm not concerned about a sudden hard drop in UVXY from the lows. Buying at 8.00 with a stop at 7.90 (-1.3%) is comfortable, and getting stopped out simply sets you up to buy at 8.00 or lower on a move up.
I think I could have got the 2.5% if I was expecting to day trade and looking for 2-4% per trade. Otherwise, the main reason for UVXY is we are looking for 10% or more (hopefully 50%) on a 2-3 day spike, so we should be keeping stops loose at breakeven for the most part, especially while I'm at work and not day trading. You seem to have a good handle on KOLD and UVXY quick day trades, so no reason to take on more risk. Plus with a couple wins, you could have held in case of a pop at the open tomorrow. Gives you some flexibility. So the quick day trades are the best route if you get it right.
For now, UVXY and KOLD/UNG are best as day trades. Once we get winter out of the way, then there will be less risk of a surprise gap move up in NG. I don't expect a big down move in the markets so UVXY will likely remain muted, but with day trade opportunities.
Today was similar to yesterday for UVXY. Could have bought at the open and sold in 30 minutes for about 3%. Something I noticed though, when SPY made a lower low in the after noon, UVXY made a lower high. VIX was like a double top.
On the daily chart VIX paints a disturbing picture for the markets, making a higher low on 27DEC, then a double bottom on 11JAN. SPY held the support I mentioned at 471, so this could blow over. But I will be out of my SOXL if things head south tomorrow.