First, I'd like to say I don't like the comment setup on this site. Second, the markets are still looking very weak, so volatility is staying elevated. I was 'lucky' to have held UVXY shares from Friday and sold off the open on Monday for +7.8%. I made several trades on the day because the markets seemed ready to crash but finally held up. I was surprised to see volatility up on Tuesday, but it was still the right decision to have sold out of UVXY and not be long anything either. It opened 16.34 (+3.4%) and I put in a stop buy at 16.45. It hit .38 and fell to 16.10. With the markets again looking very weak, I bought UVXY, sold at 16.60, then bought some back as it shot higher, then sold at 16.98 as it fell from 17.08. It made sense to sell and markets were pushing up but seemed likely to resume falling, so I bought UVXY again at 16.44 as it moved up from dropping to 16.34. It just hit 17.18 but I'm very hesitant to sell for 4.3%. The markets can potentially fall a lot more and VIX is only 18.50. Best to stay in UVXY a be willing to give up some of the current gain and not over trade the rest of the day.
I was able to buy UVXY premarket but then got stopped out for only 0.6% gain early in the morning. I was not able to keep an eye on the market as I was busy at work, so I missed the initial surge to $17.00. I decided instead to set a buy stop for SOXL. When I looked back in the afternoon, my order had triggered for $17.80 but I was already down 3% so I sold. Important lesson: don't try to be an active trader if you are not watching! So I also missed all of UVXY move up. But looking back if I were able to watch I would have caught some of the upside.
Did you get a better price pre-market than the open of 16.34? I still don't recommend pre-market but haven't tried it myself because my account doesn't provide it. I also feel like the big fish are trying to eat the small fish that come into the pool at the open.
Let's review the 'rules'. A slightly higher open, so be ready to buy on move up. My stop was 16.45 and then would have put in stop sell at 16.25. Once it started falling, watch and hope it gets back to yesterday's floor of 15.80 and probably lower your stop buy to 16.25 once it falls to 16.10. Once it moved to a new high (hit 17.08, +5.1%), move your stop to breakeven. It fell to 16.34 so a higher stop would have knocked you out. Even 16.25 could have been knocked out, but if you get an alert then you can hopefully take a break from work and make a quick decision. After that, best to let it run. Missing the initial surge to 17.08 still provided a chance to buy at 16.40 or 16.50 when it reversed from 16.34. VIX is still under 20 and can quickly go to 30 under 'normal' fear conditions.
I also took a trade in SOXL and sold with a tight stop. Getting an alert when you stop buy is executed allows you to then set a stop sell. There was no buying force today so I remained skeptical. When the big boys start buying, it's a relentless move up that seems like it can't last but it does, so that's when you need to just hang on for the full ride. SOXL held 17.50 floor till 1:30 from getting stopped in before 11am. Plenty of time to get your stop sell in at 17.40 for -2.2% or a limit at 17.60 for -1.1%. Good that you did sell for the 3% loss versus holding and hoping it would go up.
Plan for tomorrow? SPX reached Avi's upper support range (4230-4274SPX region). If that fails, then "A lower support region below is in the 4165-4185SPX region. Should we see a breakdown below that support, then that opens the door to a major top being struck, setting us up to break down below the October 2022 low over the coming year." That will send VIX well over 30. Every day is a new opportunity to get back in the game while abiding by the maximum 1% loss rule. With wider swings now, upping to 2% will help keep you in the game. Good luck to all of us tomorrow!
Yes, I got 16.14 pre-market, but got stopped out early at 16.22. From now on my plan is to buy early and get a stop in place before going back to work, preferably a breakeven stop. I don't think I can use buy stops because I may be unable to look for several hours at work. Some days are more busy than others.
UVXY I still like to watch the 1 hour chart and buy when it is above the 20 MA.
SOXL the 4 hr chart looks better and buy above 20 MA. That would have kept me out today but I didn't follow that personal rule.
Yes, still very excited that every day is an opportunity. I like this strategy. It seems I could only trade UVXY and SOXL and ignore everything else, and keep 80% earning 5% while I trade the rest.
Definitely stop buys are difficult to manage sometimes. I completely agree with only trading UVXY and SOXL as major positions. I'm not there yet but working on it. And it's great that you see that every day is an opportunity. Once the top gets hit, then it's important to not be looking for daily opportunities. We're nearing support so that may come soon. After the next market rally, I may just focus on UVXY and forget about SOXL or any long position.
Thursday premarket, VIX was up over 8% to 16.50 and UVXY was up 9%, so +18.5% from buying early yesterday. They're dropping slowly now with 15 minutes to open. If you didn't buy yesterday, you don't want to chase it, but you don't want to miss a further run either. If you're holding any long market positions, they're also lower this morning and you don't want to ride them lower. But, this could also be the big money playing around, like August 15-18. The question is, will they push the markets lower today and tomorrow, or push them up from the gap lower today? The first minutes up to 30 minutes are critical. I'm going to sell half at the open, ready to sell the rest or re-buy, then stick to the rules. Good luck!
I bought UVXY at 15.05 as it turned up sharply from 14.98. The markets turned down again from another failed rally. They look really weak, so best to be back in UVXY with a stop now at 15.08. ... oops, too tight as it executed on a brief drop to .07 on the charts. I hate that and should set stops accordingly. Back in at 15.16 with a stop at 14.90. It's a much smaller position now ... forgot to click post, finally sold at 15.30. Markets are showing a bit of strength, but I won't be holding any leveraged positions overnight. Happy to have UVXY back down so willing to give up the long side and have UVXY gap lower.
Okay, sold UVXY, bought SOXL, stops in place, UVXY stop buy at 15.20 with alert in case it gets jumped over. ... executed while typing, out of SOXL with new stops in. I expected an initial move up in the markets (down with UVXY) and then either a reversal or continuation. ... 9:50+ and UVXY shot up, now stay with it all day or sell for 15.20 or 15.00. I'm keeping mine loose. Watch at 10am for 10 minutes then relax.
Sold UVXY 15.30 and in SOXL with stop at 17.85 now. Alerts set for a sharp move. Hopefully the fireworks are finished and VIX will fall back down and the markets will hold.
You're still doing too many trades. My trades as follows:
Held UVXY from yesterday (bought 13.34) until it stalled and sold at 15.33 (14.92% gain!). Bought SOXL a couple times and got stopped out each time for small gains <1%. Set a stop buy for UVXY at 15.25, which I sold at 2:55 for 15.67 (another 2.75%!). The SOXL trade was questionable and I knew it. I should have waited for the market to reach support first.
I have to say this is a huge relief. After 3 weeks of getting stopped out every day, I am now up 22% while the market is -4% with the funds allocated for this strategy. I am not having to watch all day but I do check in every 90 minutes or so.
With SPY breaking the 20 week moving average and falling almost to $430 support and VIX hitting primary resistance at 17, I am in cash. While I could be greedy and continue to hold, the strategy for me is to not hold overnight unless it is clear we are going down (like last night). Also, if I can make 22% while the market goes down, I simply need to buy SPY tomorrow and I will outperform the market easily. I expect a retest of SPY 438 in the next week or 2 followed by a lower low that tests the 200 day MA around $423 in mid OCT.
Bravo! I was lucky to get 15.80, put in while it was holding .50s. You're right, I'm still making too many trades, but I wanted to squeeze the last bit out of this run since I wasn't able to get in with a large position. I also traded some SOXL and TQQQ for small gains and then bought PSQ to hold. I don't imagine the brakes will be hit to stop the markets at current levels. I'm glad you've been able to see and experience how the trade concept for UVXY works. Now that you've got the first win under your belt, you can relax and wait for the next setup.
Yes, but there's still a potential that the market heads straight for 200 day moving average at SPY $418. I see that as unlikely as Avi has his blue box only about 2% below current levels. I may attempt to get back in UVXY if there is market rally to SPY $438, but I plan to not chase UVXY any higher without a pullback.
For sure, be ready for another UVXY trade. An SPY drop to $418 would likely send VIX to 30+. Holding UVXY overnight today would have been a reasonable decision.
Wed. Sep. 20, FOMC day, and a 9.5% move if you bought the early low of 12.90 and did nothing all day. A classic example of "less is more" and a great example of how the strategy works. Buy early with a tight stop, expecting some volatility on the day. You may have bought and sold off the open, then bought again around 10am as it reversed from a spike low. Then keep a loose stop and let it run. My new deposit wasn't yet available to trade and as a result I over traded a smaller position. Lesson learned yet again. I'm holding for tomorrow and will be watching for a gap lower and reversal in the markets, thus a gap higher for UVXY and drop, so will likely sell a gap up open.
I actually bought premarket at 13.20 then got stopped out at the open for a small loss. Do you recommend avoiding premarket? I then put in a stop buy at 13.40 for a double position and held that the rest of the day and overnight. I will tighten my sell stop tomorrow, because SPY is at the final line of defense - the 20 week moving average of $438. Below that it will immediately drop to $430, then a relief rally to retest $438 and final drop to $420-$425 over the next few weeks. UVXY will likely get crushed on that relief rally or a bounce off $438.
Yes, I recommend avoiding premarket for UVXY. When you say you "put in a stop buy at 13.40 for a double position", did you re-buy the initial position that was stopped out? My stop at 12.90 was poorly chosen, but I jumped back in at 13.03 at 10am and set a new stop of 12.85. Moving it up to 13 later would have been okay but I sold the 11:30 drop at 13.30, re-bought in the teens, eventually sold after FOMC at 2pm and then re-bought the reversal. Way too much effort and I simply need to remember the rules: let it run all day if you're up and don't take a small gain, especially on days with an event like FOMC. The trick now will be to stick to the rules tomorrow.
What makes you think UVXY will get crushed on a relief rally? I think today could end up looking like August 15 with another down day tomorrow and a gap lower on Friday that reverses. Regardless, the trade strategy remains the same, and if you missed today or sold out, the trade strategy remains the same. For you and I holding some shares, the trade strategy still remains the same. I will be ready to both sell and buy tomorrow, and will then force myself to not trade all day if the price remains above/below my buy/sell price. With VIX just over 15, there's a lot more upside potential than downside risk.
Yeah, I felt confident in a move up if UVXY > 13.40 so I bought 2x what I had bought/sold in premarket. Fortunately for me, I am still working and can't "over-trade" during the day, so putting in stops and letting it run is my only choice.
At some point the market will bounce - probably soon with 20 week Moving Average support just underneath. That type of bounce could lead to VIX dropping back to $13 and UVXY would drop probably to 12. A 20 wk MA is very strong and typically holds the first test which is where we are this week with SPY at $438. Of course below $438 I think VIX/UVXY goes to 17.00, so I may even add to UVXY if 438 is not holding tomorrow. 17.00 is the primary downtrend resistance for VIX.
Very tempted to add to my UVXY position with VIX breaking the downtrend, closing above $15 and above 50 day moving average. The prudent thing to do is to wait until tomorrow and confirm SPY, DIA, and QQQ break that 20 week moving average.
Tues. Sep. 19, bought 13.40 before 10am with markets down. Sold 13.90 (+3.7%) near 11am with market drop stalled, alert at 14.00 and 14.10. Already bought SOXL and TQQQ with early trade SOXS. FOMC tomorrow and hopefully markets will make a move up or down so I can stop watching so closely.
I rebought some UVXY at 13.75. I've learned from experience that these pullbacks on days like today can be a chance to get back in, or get in if you missed the earlier move. As always, buy and set a tight stop. For now, I'm leaving my stop sell at 13.75 as it made a new high for the day of 13.97. I will likely hold this small position overnight.
I upped my stop to 13.87 and don't want to buy now at 13.70, but might. These comments are for active traders. This article was written for non-active traders, so they can ignore these daily comments and simply wait for a big move.
I bought UVXY at 13.42 and again at 13.69. Each got stopped out for .01 higher than buy price at the end of the day. No holdings again overnight, but VIX is not falling which has me leaning towards a stronger spike eventually. SPY held 442 yet again.
What time was your 13.69 buy? I'm guessing 11:30ish when I bought 13.75. I prefer to sell out completely, so would have sold all on late drop, as I did at 13.87. VIX and UVXY could make a rip higher if the markets fall. I decided to buy at 13.30 late given FOMC is tomorrow. It's very, very unlikely to gap a lot lower and not likely to gap a lot higher, but since I've got trading gains the past 2 weeks, I wanted a small position back. Definitely not following the rules, but it's just 'batting practice' while I wait for a home run setup.
13.42 was right after open and 13.69 was at 11:30. I am set my first stop at 13.43 then at 11:30 I happened to look and saw that SPY was well below support so I bought the 13.69 dip and put a stop at 13.70. I was hoping to hold the early buy overnight and was expecting to sell the 2nd one for 3-5%, but while I was away UVXY tanked. I was starting to think I had finally got in at the bottom of a multi-day rally and didn't want to sell out too early and have to chase the rest of the week.
I disagree - UVXY could easily gap lower with VIX dropping to retest 13.00. , or make a higher low. Overall, SPY is holding 442 support and VIX remains subdued. It would be different if SPY was at resistance like at the end of July.
I will continue the same practice as today was clearly not the beginning of a crash. Maybe tomorrow.
Agree but a VIX drop to 13 would only happen after FOMC. SPY could also break support which would trigger VIX higher. Anyway, I have a deposit to my account that will be ready for tomorrow to trade an extra zero, thus I was happy to buy at 13.30 today, versus a possible 14+ tomorrow. If I can buy under 13 tomorrow, that would be great and would simply stop sell all if it drops.
In particular, he comments on how the markets rallied on Wed. and Thurs. with bearish CPI and PPI data, then fell on Friday with no news. He's still predicting a larger pullback, so keep that in mind as you make your decisions. I decided to buy some UVXY at 13.20 without a stop sell since I won't be watching closely and it's a small position. I don't want to be stopped out and have it reverse, and with FOMC on Wed., it's unlikely VIX will drop sharply and it's already low.
I bought UVXY 2x today and got stopped out for .01 gain each time. I got SOXS for 2.5% gain but lost 2.5% with KOLD. Still learning. I was busy and did not get my stop set with KOLD. I will be setting a limit buy at 58 for KOLD as it has strong support from the trendline and moving averages. As far as UVXY, I will continue to look for a buy early in the day with stops, however, I think I will only buy if VIX has actually broken a down trend. Today VIX appeared to do so, which is why I bought in. But it dropped all day and closed below the trendline and below 20 day MA. I could see go either way, so I will just wait for the breakout.
SPY barely moved today and stayed below 20 day MA but above the trendline support (442). So nothing has changed and there is no need to hold anything or guess. The market will decide VERY soon as trendlines are converging.
So, the big boys seem to have finished off their Friday game today, with a gap lower in the markets Monday and then buying. We're only 7 minutes in, so now just watch for a move past the early high. I'm going to stay alert for a reversal and maybe catch the bottom and more importantly, sell the top of SOXL since I bought it. Good luck!
16 out of the past 16 Mondays the $VIX opened >2% higher than it closed on the preceding Friday. You can't buy the index but you can buy VIXY, which due to decay you do not want to hold more than a few days. Unfortunately due to the way VIXY is structured, the 16/16 VIX gains did not translate into VIXY gains every Monday at the open. However, it has led to a 6% gain over 16 weeks, and gives you the chance to be buying low at a possible huge run, while holding VIXY the past 16 weeks would have been a -35% loss.
It doesn't make sense to buy VIXY every Friday, but if the market is stretched and showing divergence, and VIX has started a new uptrend, it makes lots of sense. It's hard to imagine the market sentiment being any "less scared". CNN Fear and Greed Index has settled in the 70-80 range in an unusually calm plateau.
You could just sell at the open, or sell some, or set a trailing stop. I have a 20% position at 14.00. I am taking a huge bet that volatility is going to rise, likely starting with a gap up Monday. SPY has already gapped up to multiple resistance trendlines. If I am wrong and VIXY fades away, I will sell at < 13.68 which would be a break of the previous low 13.69. It would cost me a mere -2.5% loss on a setup that could result in an easy 10-20% gain or more. With VIXY there's always a chance it will go on a 100% rally like JAN2022, or 500% in MAR2020.
Good points. I've been watching the hourly chart for UVXY and waiting for uptrends to start. The last uptrend started Feb. 9 and was looking good until NVDA gapped the markets up and VIX down. A new uptrend potentially started that same day, Feb. 22, but that failed at 12:30 on Friday, Feb. 23. Normally, I would not recommend buying late in the day since the trend was clearly down. With SPX pushing above weekly resistance on Thursday and early Friday, then falling, the potential for a gap lower on Monday is high, which makes holding VIXY or UVXY a reasonable bet. They may however, gap lower and then push up strong like Jan. 24, so I will be watching to sell and buy early.
It's also useful to note that the lows for VIXY and UVXY are getting progressively closer to the previous low all year. (VIXY 14.43 > 13.94 > 13.78 > ?) 13.50 to 13.65 could be the next low. For UVXY, perhaps 6.80 - 6.90 range. I will continue my strategy of watching for an early buy and a move up on the day.
I guess it played out as expected with VIXY dropping slightly and VIX opening up 2%. Instead of selling at 13.68, I doubled down. It has dropped so far and it seemed to be holding. We'll see what tomorrow brings. I will continue to add until I get to a 100% position, then I will put in a -3% stop loss. It barely moved today so no chance to trade it.
Today appeared to be the start of a rally up in UVXY looking at a 30 minute chart. A gap up in the morning after a long weekend with the market teetering on support. If you bought at the open and set a 1-2% trailing stop, you would have been stopped out for breakeven. Same thing last Friday with the spike at 11:30.
Now with UVXY falling back to 8.40 support yet again, what's the decision? A gap lower at the open tomorrow? Here's where I think buying support doesn't work for UVXY. You only want to buy it if it is rising with a buy stop. On the daily chart, the downtrend and 20 day MA put resistance at 9.00. On the 30 minute chart, a different downtrend puts resistance at around 8.60 to 8.70 for Wednesday.
1. A gap up in UVXY is almost always a good buy signal. You may think you have missed the buying opportunity, but buy anyways and it is usually rewarded.
2. Most of the spikes are preceded by a flattening or rounding bottom, then either the gap up or a strong day up. Both should alert a buy signal.
Caution: it is difficult to see the intraday volatility on these daily charts. There will be times you get stopped out by a 1 or 2% stop, then it goes right back up.
1. You can usually put in a slightly lower limit buy than the indicated pre-open price and watch the open, giving it 5-10 minutes to reveal some 'character'. Buying at market can sometimes then have you sitting 1-2% down within minutes and wondering if it will reverse. I'd rather give up 1-2% from the open, grab it moving up and able to quickly sell if it reverses.
2. Agree, once VIX has well and truly bottomed for several weeks or months. Prior to that, like now, strong days, like Nov. 14 can be brief, so best to take the win. I stayed long that day since I was biased, expecting the markets to drop. That bias had me looking the wrong way and missing a long move.
I think the message from these daily charts is to ignore the intraday volatility. Anything less than 5% is simply 'noise'. It's best to be well rested and ready for the next stretch of UVXY trading when it comes, which could be in 3-6 months.
Nice addition with the daily charts. You didn't mention this but there are several false starts on the daily charts. It you follow the rules and sell for -1% or -2% a couple times in a row don't get discouraged. You can see on these daily charts that this strategy soon pays off with +20% to +50% which more than compensates you for the handful of -1% days. Nice work!
UVXY did not quite make it to the lower BB yesterday. Now it would have to drop to 11.81 today. I will be watching because it may cross the 20 hr MA first.
I was able to buy 2nd half of TQQQ position yesterday, and 100% position of SPXL in my margin account. We'll see if we can get a rally today so I can set stops to breakeven. TQQQ needs to get to 41.20 and SPXL to 85.63.
I made one more attempt on SA to comment about trading TQQQ and only got negative feedback. I have cancelled my subscription and will keep in touch with you here. I haven't learned anything valuable from SA for 3 months since I discovered you. Good luck this week.
Great job buying more TQQQ yesterday. I saw it under 40 and nearly bought, but didn't. I did buy SOXL but sold it later for a small gain. I was simply too worried about a potential drop with the CPI data today. Too bad you didn't buy TNA. I thought about buying it too.
UVXY was a really difficult trade today. I did buy but it was really difficult to stay with it as it went up with the markets. Now it's flat with the markets sliding lower. I'm feeling compelled to hold now. I also bought some PSQ to sit on today. Selling some individual positions that I bought back yesterday. I also finally bought some SOXS at 8.75, up from 8.66 and TZA as it held around 30, then was stopped out at 29.85 and re-bought reversal.
I hate to suggest selling your positions and taking the windfall, as they may continue higher, but QQQ is nearly back to its July high, and isn't likely to just roar on higher. SPX might gap higher tomorrow. I don't see a big reversal coming and will likely sell SOXS and TZA today. XLK made a new all time high, which I was expecting to come soon. The more I think about it, the more I think you should hold as TQQQ and SPXL are only up 5.6% and not 13% like others. Congrats!!
I couldn't buy TNA because it was still in a downtrend. Then it opened too high. A gap up is generally a good sign, but an immense gap up after a huge rally is risky. I actually went against my rules and sold SPXL and TQQQ today at $87 and $42.67 respectively. I should be waiting for a sell signal, but I wanted more than paper gains to start out my new strategy. It somehow gives me more confidence knowing I have a buffer of a profit so I can feel good going all in 3X again next time.
Plus UVXY fell below BB so I wanted to buy some as it seems to be a 70/30 probability this rally will take a quick 1% drop and I will get at least 4-5% on UVXY. I went big on UVXY again - 10% of my account - at 11.61 following my rules and your rules!
It is strange when UVXY moves up with the market. It generally means people feel we are at a top and as the market goes higher they are willing to bet on more volatility. This will usually lead to a rollover top in the next few days.
Also, we are at the top of Avi's range for this rally. I still have some respect for his calls.
Finally, SPY has 3 recent gaps to fill. Usually 1 gets filled within a few weeks, a 2nd within a few months and the 3rd maybe never. There, now you see why I took the profits. Hopefully UVXY goes to 20.00.
I haven't seen any numbers from Avi since Oct. 30 when he became much more bearish, so for me, he completely missed this run up. He's also been calling for a major run in gold and miners since the start of the year. I also still respect his calls, but ignoring them and trusting the simple trendlines would have been much, much better. Likewise, JC can get one looking the wrong way and in too early. He's been repeatedly early long and short the past several months. On this last move, he got out of his long too early and is now deeply underwater short, granted with just one half batch buy.
Are you going to stay on SA for messages and free use? Messages there are easier for us to follow versus comments here.
Locking in a cushion for your next trade makes complete sense. Sticking to rules though generally provides the best results. Being content with the gain and waiting for a trade the other direction also makes sense and follows your rules.
I bought UVXY at 11.55, stopped out at 11.50 and back in at 11.60. Out at 11.85 and stopped in to a smaller position at 11.92, out at 11.85 and forcing myself not to buy. VIX has plenty of room lower and could fall even with a small gap lower in the markets tomorrow. I would take the win with UVXY as well. It's a momentum trade and there's no momentum now, just flatlining and the markets are consolidating and holding the gap move. UVXY will hit 20, but it might hit single digits first, which I think is more likely. And the rule says don't hold unless you're up 5% or more by the close.
I appreciate your perspective on UVXY. How tight were your stops? I just waited for a decent sized green bar on the 15 min chart which gave me 11.61 and it never went below 11.60 once I bought. I am up about 4% on UVXY so I held overnight. A gap up in the market would be a 5th unfilled gap and 99% likely trap.
I will see if SA works for messages only because I agree the format is better.
Nice pop in UVXY to close giving you a better cushion. I actually sold at market at 11.50 since I saw it dropping and the early low was .49, the high was .57 and markets were pushing up. Setting the stop buy at 11.60 was rather aggressive but I felt it made sense. Later sells were also at market, hoping to get out with a small gain and have it fall, but it never fell. After 2 attempts, I decided I wouldn't re-buy again. I'd rather miss a gap higher with UVXY and have a chance to buy something long and have it move up over the day. Holding UVXY could have me taking a loss (again) and seeing the long options at even higher prices (again). I also looked at the Nov. 1-3 bars and figured we could easily get that again. There's also no gap on the weekly chart and it's "back in the lane". Some sideways days now would reasonable.
I was not expecting UVXY to make a rally today being Friday and it mostly bounced around. The 15 min Bollinger bands were perfect buy/sell points today, but I did not attempt any trades. Instead I focused on SOXL as it was often near support on Bollinger bands across almost all time frames. I made several trades, mostly breaking even as I set stops only once I was up 1% or so. Total on the day I only made about 0.1% but better than SPY again. Also no trades were losses.
SPY is at critical support so no reason to hold UVXY over the weekend, though tempting. Looks to be another test of the 200 day MA which is still rising. Actually closed under it, but I would expect major whiplash next week in a range between 416-424 and crossing that 200 day MA many times to confuse everyone.
I gave UVXY the benefit of the doubt all day, got the early rally and sold, got a bit on the noon rally and sold, then took 3 swings around 1:30 from 18.50 and third time was the charm. I put in a sell at 19.90 for a late rally or content to hold over the weekend. I was skeptical of SOXL all day but took 2 trades for 1%, one for 1.4% and one for 2.5% and bought some back late at 16.64. UVXY and SOXL don't directly conflict so it can make sense holding both sometimes.
Agree, SPY is at critical support, but there's a lot of downward momentum. It might open Monday at 416 to start the rollercoaster week. UVXY also looks strong on the hourly chart, and not way overbought like last Friday.
Were you watching today closely? There was probably 50% total moves up and down! I bought at open and survived the first dip to 16.60, but not the second dip. I got stopped out for no gain while I wasn't watching. Checked back in at lunch time to find UVXY range bound around 17.00 and decided to stay out with SPY not too far from $430 support. Today could have been really bad or really good depending on how you played the 5% rollercoaster swings. I didn't make any other attempts as I saw the market was not having a selloff. I was likely not going to make more than 1-2% and probably likely to breakeven.
Overall this seems bad for the market to have got down to SPY 430 again without even putting the gap or downtrend resistance to a test. Bulls will say this is a double bottom setup. However, we are clearly still in a downtrend and going thru whiplash. There is no reason to be in the market right now.
I'm satisfied with following the rules and not losing anything while SPY lost > 1% today.
And we thought yesterday was difficult!!! Today was nearly impossible to trade. I wasn't able to watch things closely and repeatedly nearly bought or just missed the UVXY lows. SOXL looked nearly the same as yesterday early, and I had sold and re-bought, just like yesterday, but I didn't believe it would make a strong rally again so sold the reversal and remained skeptical all day. I also decided to hold some UVXY overnight. I agree, the markets look likely to go lower. I was skeptical of the moves Monday and Tuesday.
Today was similarly choppy. I broke even on a few SOXL trades. I am glad to have lost nothing while SPY is down 1%. UVXY only likes to rally while I'm working! UVXY seems to bounce off Bollinger Bands, but varies which time frame. You could buy bounces off lower BB if multiple time frames coincide such as 2 min, 5 min, 15 min, 30 minute all being within 1%. Take a look. Also could be used with SOXL. I've been trying to find a way to buy lower instead of waiting for a 20 MA break so as to reduce the -1% stop losses.
For selling I would still use a trendline break. Prices tend to "hug" BB on the way up for up hours/weeks/months. Prices sometimes "hug" the lower BB too so that is why I am thinking multiple time frames need to align for the buy point.
Yeah, today was difficult again. I did okay but was leaving so played it cautious. I managed to buy the 1 o'clock reversal and decided to 40 minutes later, coming down from 18.03 and leaving for the rest of the day so couldn't trade. In hindsight, I should have held or at least put in a stop buy at 18.15, but that plan didn't work out earlier at 12:30. I was late seeing the move so went with a high stop that I figured wouldn't get hit unless it was really going to move. It made a 6.9% move from 16.98 to 18.16 in 15 minutes. Ridiculous! I was stopped in by a penny at the top. I bailed 5 minutes later at 17.92, it fell all the way back to 16.93 and then ran up to 18.03 and I sold again at 17.92 for 3.6% (saw the reversal late). I left 10 minutes later and all looked good, it continued sliding for another 10 minutes then went up 8.8% and this time I didn't have the stop buy at 18.15. It amazes me how moves happen like someone is watching what you're doing and they're specifically messing you up!
Best is to simply not care about catching moves on chaotic days like the past 3, or simply hold Tuesday's early buy with a very loose stop to keep you in. Even Wednesday would have kept you in with a stop at an early low buy price. Today was more difficult because it broke the early low twice. Good experience as to what's required to stay with a UVXY trade for a full run when the markets drop. Now we'll see if they can hold support and rally to a new high.
Tough day. Bought SOXL at "support" 19.01, then broke the rules and bought more at 18.50. Then got stopped out at 18.36. Also bought UVXY and got stopped out for 1.1% loss. At lunch time I found out SOXL was back above 19.01 and could not believe the reversal. Stayed out the rest of the day.
I am almost back to breakeven now due to all the stop losses adding up. But I am following the rules better lately. Despite losing on 80% of my trades (stopped out or not following rules) I am still beating SPY since SEP because I've caught 2 or 3 of the UVXY rallies. And that's really all you need to do.
I still feel like this is safer than holding SPY or QQQ because I can wake up tomorrow knowing I'm not going to be down 5% unexpectedly. Also I'm getting used to selling for a small loss and not accepting the risk of larger losses.
I expect this strategy to provide 10% per month on average. Last month was 18% and this month about -15% so far (did not follow rules most of the time). I'm going to make this work.
Yeah, it was a tough day, but could have been easy. You obviously bought SOXL pre-open at 19.01. I sold just after the open at 18.51 and put in a stop buy at .60 after it fell a bit. Normally I would have bought near 18 as it held but I was determined not to over trade and get sucked in buying and then taking an additional small loss on a drop. I happened to be watching when it shot up so I grabbed some at market and then it triggered the stop buy while I was wondering what to do. I then sold as it fell from the high at 12:30 so did okay, but it was a small position.
I bought UVXY at 16.25 as it was moving up from .19 in the first 5 minutes, then was stopped out at 16.15 on the brief spike lower. Grrrrr...., and I bought half back the next minute at 16.34. As it approached 10 o'clock, I sold as it dropped from 16.66, got .62 with half and stopped out at .50 with the rest. So, played it mostly right. I then bought some back at 11:30 since I was going outside to work and it was back to yesterday's low and up from 15.56, got 15.63. I happened to see it as it was moving up from 15.17 and decided not to add and went back outside. I would have bought for sure if I had been watching. An hour later it was up to 15.73 and stalled, and I was in for a quick check so I sold. Grrrr...., and it went up 4.5%. I finally decided to buy back the small position in both UVXY and SOXL, so the same holding as yesterday and made a bit trading. Could have done much better if I'd been watching. Oh well, part of the goal is to develop a system that doesn't require constant watching.
I completely agree with your 10% per month target, but there will likely be months in a row without a solid 10% trade in UVXY if the markets are able to gain traction and move to new highs. SOXL will likely provide it then and I'll be content to get less during those periods, knowing that I'll be able to get more when the markets drop.
Nice update. With the VIX bounce Friday, it has cemented a higher low. I am reluctant to believe it myself as it is hard to buy something up 20% in one day and hold it over the weekend. However, I have stated myself that VIX was at 17 and that was a starting point for every bear market. In addition, a higher low was also a prerequisite for every crash. The fact that SPY barely moved is curious, and makes me suspect a gap lower Monday morning because it "held" support Friday.
Ultimately better to be safe and in cash. Then play the daily move and walk away each day win or lose.
I did hold some UVXY from Friday, mostly as punishment for not catching the big move with a large position early and sticking with it all day. Today I was happy to give back some of the gains for a chance to play it better today. I sold it at the open and bought some SOXL off the open. I've let it ride and was watching to buy more but didn't. Should have on the dip but okay that I didn't, since I also have shares from Friday. I bought UVXY at 16.88 as it moved up and left a stop at 16.80. I came in to today with a better mindset to trade much less and have it set so I put in the pre-open prices and know where 2% up and down are. That helped a lot. I'll continue to watch for a possible reversal but focus on trading less. Have a good day!
I'm guessing you were stopped out of UVXY. I bought SOXL pre-market at 19.00 then sold for 19.19 also pre-market as I wasn't going to be around at open. I can't set stop limits pre-market. Then I set another buy limit at 19.01 which never triggered. I was quite busy today and not able to watch, but I see there was really no trading to do anyways. I should have just held SOXL. At lunch I saw it was topping out and decided to stay out. I will buy a pullback tomorrow as I like to buy SOXL off support around 19.20.
UVXY: easy to stay out all day as it never bounced or broke 20 MA on 15/30/60 minute candles. SPY looks headed to fill gap at $439 and test 50-day resistance (also downtrend resistance). This is when UVXY might turn so be ready.
I sold UVXY at the open, re-bought early reversal and sold for breakeven on stop, then happily watched it slide. I bought some SOXL early and held it all day. I thought it might finally break higher, thought to sell at a top but stuck with my plan to let buys run and not over trade. I'm surprised how big the market reversals were, over 1%. No predictions where they're headed next and will simply watch for early moves.
VIX has dropped back to 17.45 which is incredibly low. It could still bounce from trendline support. However, if it falls again Monday, it will likely be heading back to 14-15 or lower. Monday seems to be the perfect opportunity to buy UVXY early and set a 1% stop loss. Everyone is suddenly bullish because it seems the market didn't crash after all. But we are still in a down trend and volatility should be expected below SPY 440 especially below 430. If we get to SPY $438, I will be looking to buy UVXY at support.
17.45 VIX is incredibly low relative to what? Last Friday early was 15.83 as the markets gapped higher and fell. I suspect Monday could also be a gap and a move in the opposite direction. From the comments by JC and others, they've been bullish for weeks. JC made his first UDOW buy on Sept. 13. (Another example of buying early and riding it down 14.7% and buying more en route.) Robert at PAM has also been bullish and expects a rally to mid October. He's really difficult to follow, but there's a lot of bullish in the small fish and the big fish stepped up on Friday. What happens next, as always, is entirely up to them.
I was thinking of writing an article this weekend on the theme, "Better to be a day late, than weeks early." I missed buying SOXL early Friday which was a very easy setup for 10% on the day. Now I need to be ready to take whichever setup comes Monday, whether it's SOXL/S and UVXY. Friday's move seems excessively large, but the move on Oct. 13, 2022 was also excessively large and it was the start of a long run up. Good luck Monday!
In comparison, VIX was 17.08 on 21FEB2020 and 17.22 on 31DEC2022. Also 17.83 on 30MAY2008. The point is, historically VIX at 17 is very low and huge crashes have happened from these levels. More and more I am only interested in day trading until a long trend is re-established for SOXL.
13OCT was followed by a great short trade the next day. The actual confirmed bottom for SPY was 21OCT when the 20 day MA was held as support and began rising. In addition there was divergence in RSI, MACD and MFI on daily and weekly charts. Finally the OCT bottom also coincided with 200 week MA support. Today is not similar so I am looking for SPY to reclaim 20 day MA and $440 before holding long overnight.
Great title "Better to be a day late, than weeks early." AKA let someone else find the bottom.
Good points all around. For people new to VIX and trading UVXY, it's good to realize that 17 during a period of weak markets is low. When markets are in an uptrend, VIX is generally below 15 and buying then and waiting is a terrible idea, as proven by the author of a June article on VIXY. He's still underwater since buying and holding then.
I am definitely watching for a gap up and drop tomorrow. Having a firm floor as a guide going forward is very helpful. QQQ and SOXX made their low September 27 and have had higher lows since. All in all, there's finally some confirmation of a bottom so taking a hard shot long on the next pullback is a good idea. A month of elevated volatility is also quite a lot.
It's very helpful that you're looking back through the history to give another perspective. Thanks! JC first bought SOXL and UDOW nearly 4 weeks ago, and my thought at the time was it seemed early and optimistic.
First, I'd like to say I don't like the comment setup on this site. Second, the markets are still looking very weak, so volatility is staying elevated. I was 'lucky' to have held UVXY shares from Friday and sold off the open on Monday for +7.8%. I made several trades on the day because the markets seemed ready to crash but finally held up. I was surprised to see volatility up on Tuesday, but it was still the right decision to have sold out of UVXY and not be long anything either. It opened 16.34 (+3.4%) and I put in a stop buy at 16.45. It hit .38 and fell to 16.10. With the markets again looking very weak, I bought UVXY, sold at 16.60, then bought some back as it shot higher, then sold at 16.98 as it fell from 17.08. It made sense to sell and markets were pushing up but seemed likely to resume falling, so I bought UVXY again at 16.44 as it moved up from dropping to 16.34. It just hit 17.18 but I'm very hesitant to sell for 4.3%. The markets can potentially fall a lot more and VIX is only 18.50. Best to stay in UVXY a be willing to give up some of the current gain and not over trade the rest of the day.
I was able to buy UVXY premarket but then got stopped out for only 0.6% gain early in the morning. I was not able to keep an eye on the market as I was busy at work, so I missed the initial surge to $17.00. I decided instead to set a buy stop for SOXL. When I looked back in the afternoon, my order had triggered for $17.80 but I was already down 3% so I sold. Important lesson: don't try to be an active trader if you are not watching! So I also missed all of UVXY move up. But looking back if I were able to watch I would have caught some of the upside.
Did you get a better price pre-market than the open of 16.34? I still don't recommend pre-market but haven't tried it myself because my account doesn't provide it. I also feel like the big fish are trying to eat the small fish that come into the pool at the open.
Let's review the 'rules'. A slightly higher open, so be ready to buy on move up. My stop was 16.45 and then would have put in stop sell at 16.25. Once it started falling, watch and hope it gets back to yesterday's floor of 15.80 and probably lower your stop buy to 16.25 once it falls to 16.10. Once it moved to a new high (hit 17.08, +5.1%), move your stop to breakeven. It fell to 16.34 so a higher stop would have knocked you out. Even 16.25 could have been knocked out, but if you get an alert then you can hopefully take a break from work and make a quick decision. After that, best to let it run. Missing the initial surge to 17.08 still provided a chance to buy at 16.40 or 16.50 when it reversed from 16.34. VIX is still under 20 and can quickly go to 30 under 'normal' fear conditions.
I also took a trade in SOXL and sold with a tight stop. Getting an alert when you stop buy is executed allows you to then set a stop sell. There was no buying force today so I remained skeptical. When the big boys start buying, it's a relentless move up that seems like it can't last but it does, so that's when you need to just hang on for the full ride. SOXL held 17.50 floor till 1:30 from getting stopped in before 11am. Plenty of time to get your stop sell in at 17.40 for -2.2% or a limit at 17.60 for -1.1%. Good that you did sell for the 3% loss versus holding and hoping it would go up.
Plan for tomorrow? SPX reached Avi's upper support range (4230-4274SPX region). If that fails, then "A lower support region below is in the 4165-4185SPX region. Should we see a breakdown below that support, then that opens the door to a major top being struck, setting us up to break down below the October 2022 low over the coming year." That will send VIX well over 30. Every day is a new opportunity to get back in the game while abiding by the maximum 1% loss rule. With wider swings now, upping to 2% will help keep you in the game. Good luck to all of us tomorrow!
Yes, I got 16.14 pre-market, but got stopped out early at 16.22. From now on my plan is to buy early and get a stop in place before going back to work, preferably a breakeven stop. I don't think I can use buy stops because I may be unable to look for several hours at work. Some days are more busy than others.
UVXY I still like to watch the 1 hour chart and buy when it is above the 20 MA.
SOXL the 4 hr chart looks better and buy above 20 MA. That would have kept me out today but I didn't follow that personal rule.
Yes, still very excited that every day is an opportunity. I like this strategy. It seems I could only trade UVXY and SOXL and ignore everything else, and keep 80% earning 5% while I trade the rest.
Definitely stop buys are difficult to manage sometimes. I completely agree with only trading UVXY and SOXL as major positions. I'm not there yet but working on it. And it's great that you see that every day is an opportunity. Once the top gets hit, then it's important to not be looking for daily opportunities. We're nearing support so that may come soon. After the next market rally, I may just focus on UVXY and forget about SOXL or any long position.
Thursday premarket, VIX was up over 8% to 16.50 and UVXY was up 9%, so +18.5% from buying early yesterday. They're dropping slowly now with 15 minutes to open. If you didn't buy yesterday, you don't want to chase it, but you don't want to miss a further run either. If you're holding any long market positions, they're also lower this morning and you don't want to ride them lower. But, this could also be the big money playing around, like August 15-18. The question is, will they push the markets lower today and tomorrow, or push them up from the gap lower today? The first minutes up to 30 minutes are critical. I'm going to sell half at the open, ready to sell the rest or re-buy, then stick to the rules. Good luck!
I bought UVXY at 15.05 as it turned up sharply from 14.98. The markets turned down again from another failed rally. They look really weak, so best to be back in UVXY with a stop now at 15.08. ... oops, too tight as it executed on a brief drop to .07 on the charts. I hate that and should set stops accordingly. Back in at 15.16 with a stop at 14.90. It's a much smaller position now ... forgot to click post, finally sold at 15.30. Markets are showing a bit of strength, but I won't be holding any leveraged positions overnight. Happy to have UVXY back down so willing to give up the long side and have UVXY gap lower.
Okay, sold UVXY, bought SOXL, stops in place, UVXY stop buy at 15.20 with alert in case it gets jumped over. ... executed while typing, out of SOXL with new stops in. I expected an initial move up in the markets (down with UVXY) and then either a reversal or continuation. ... 9:50+ and UVXY shot up, now stay with it all day or sell for 15.20 or 15.00. I'm keeping mine loose. Watch at 10am for 10 minutes then relax.
Sold UVXY 15.30 and in SOXL with stop at 17.85 now. Alerts set for a sharp move. Hopefully the fireworks are finished and VIX will fall back down and the markets will hold.
You're still doing too many trades. My trades as follows:
Held UVXY from yesterday (bought 13.34) until it stalled and sold at 15.33 (14.92% gain!). Bought SOXL a couple times and got stopped out each time for small gains <1%. Set a stop buy for UVXY at 15.25, which I sold at 2:55 for 15.67 (another 2.75%!). The SOXL trade was questionable and I knew it. I should have waited for the market to reach support first.
I have to say this is a huge relief. After 3 weeks of getting stopped out every day, I am now up 22% while the market is -4% with the funds allocated for this strategy. I am not having to watch all day but I do check in every 90 minutes or so.
With SPY breaking the 20 week moving average and falling almost to $430 support and VIX hitting primary resistance at 17, I am in cash. While I could be greedy and continue to hold, the strategy for me is to not hold overnight unless it is clear we are going down (like last night). Also, if I can make 22% while the market goes down, I simply need to buy SPY tomorrow and I will outperform the market easily. I expect a retest of SPY 438 in the next week or 2 followed by a lower low that tests the 200 day MA around $423 in mid OCT.
Bravo! I was lucky to get 15.80, put in while it was holding .50s. You're right, I'm still making too many trades, but I wanted to squeeze the last bit out of this run since I wasn't able to get in with a large position. I also traded some SOXL and TQQQ for small gains and then bought PSQ to hold. I don't imagine the brakes will be hit to stop the markets at current levels. I'm glad you've been able to see and experience how the trade concept for UVXY works. Now that you've got the first win under your belt, you can relax and wait for the next setup.
Yes, but there's still a potential that the market heads straight for 200 day moving average at SPY $418. I see that as unlikely as Avi has his blue box only about 2% below current levels. I may attempt to get back in UVXY if there is market rally to SPY $438, but I plan to not chase UVXY any higher without a pullback.
For sure, be ready for another UVXY trade. An SPY drop to $418 would likely send VIX to 30+. Holding UVXY overnight today would have been a reasonable decision.
Wed. Sep. 20, FOMC day, and a 9.5% move if you bought the early low of 12.90 and did nothing all day. A classic example of "less is more" and a great example of how the strategy works. Buy early with a tight stop, expecting some volatility on the day. You may have bought and sold off the open, then bought again around 10am as it reversed from a spike low. Then keep a loose stop and let it run. My new deposit wasn't yet available to trade and as a result I over traded a smaller position. Lesson learned yet again. I'm holding for tomorrow and will be watching for a gap lower and reversal in the markets, thus a gap higher for UVXY and drop, so will likely sell a gap up open.
I actually bought premarket at 13.20 then got stopped out at the open for a small loss. Do you recommend avoiding premarket? I then put in a stop buy at 13.40 for a double position and held that the rest of the day and overnight. I will tighten my sell stop tomorrow, because SPY is at the final line of defense - the 20 week moving average of $438. Below that it will immediately drop to $430, then a relief rally to retest $438 and final drop to $420-$425 over the next few weeks. UVXY will likely get crushed on that relief rally or a bounce off $438.
Yes, I recommend avoiding premarket for UVXY. When you say you "put in a stop buy at 13.40 for a double position", did you re-buy the initial position that was stopped out? My stop at 12.90 was poorly chosen, but I jumped back in at 13.03 at 10am and set a new stop of 12.85. Moving it up to 13 later would have been okay but I sold the 11:30 drop at 13.30, re-bought in the teens, eventually sold after FOMC at 2pm and then re-bought the reversal. Way too much effort and I simply need to remember the rules: let it run all day if you're up and don't take a small gain, especially on days with an event like FOMC. The trick now will be to stick to the rules tomorrow.
What makes you think UVXY will get crushed on a relief rally? I think today could end up looking like August 15 with another down day tomorrow and a gap lower on Friday that reverses. Regardless, the trade strategy remains the same, and if you missed today or sold out, the trade strategy remains the same. For you and I holding some shares, the trade strategy still remains the same. I will be ready to both sell and buy tomorrow, and will then force myself to not trade all day if the price remains above/below my buy/sell price. With VIX just over 15, there's a lot more upside potential than downside risk.
Yeah, I felt confident in a move up if UVXY > 13.40 so I bought 2x what I had bought/sold in premarket. Fortunately for me, I am still working and can't "over-trade" during the day, so putting in stops and letting it run is my only choice.
At some point the market will bounce - probably soon with 20 week Moving Average support just underneath. That type of bounce could lead to VIX dropping back to $13 and UVXY would drop probably to 12. A 20 wk MA is very strong and typically holds the first test which is where we are this week with SPY at $438. Of course below $438 I think VIX/UVXY goes to 17.00, so I may even add to UVXY if 438 is not holding tomorrow. 17.00 is the primary downtrend resistance for VIX.
Now I understand. 13.40 was a tough price to hold after FOMC. I can't imagine SPY holding 438. It might hold 430.
Very tempted to add to my UVXY position with VIX breaking the downtrend, closing above $15 and above 50 day moving average. The prudent thing to do is to wait until tomorrow and confirm SPY, DIA, and QQQ break that 20 week moving average.
Tues. Sep. 19, bought 13.40 before 10am with markets down. Sold 13.90 (+3.7%) near 11am with market drop stalled, alert at 14.00 and 14.10. Already bought SOXL and TQQQ with early trade SOXS. FOMC tomorrow and hopefully markets will make a move up or down so I can stop watching so closely.
I rebought some UVXY at 13.75. I've learned from experience that these pullbacks on days like today can be a chance to get back in, or get in if you missed the earlier move. As always, buy and set a tight stop. For now, I'm leaving my stop sell at 13.75 as it made a new high for the day of 13.97. I will likely hold this small position overnight.
I upped my stop to 13.87 and don't want to buy now at 13.70, but might. These comments are for active traders. This article was written for non-active traders, so they can ignore these daily comments and simply wait for a big move.
I bought UVXY at 13.42 and again at 13.69. Each got stopped out for .01 higher than buy price at the end of the day. No holdings again overnight, but VIX is not falling which has me leaning towards a stronger spike eventually. SPY held 442 yet again.
What time was your 13.69 buy? I'm guessing 11:30ish when I bought 13.75. I prefer to sell out completely, so would have sold all on late drop, as I did at 13.87. VIX and UVXY could make a rip higher if the markets fall. I decided to buy at 13.30 late given FOMC is tomorrow. It's very, very unlikely to gap a lot lower and not likely to gap a lot higher, but since I've got trading gains the past 2 weeks, I wanted a small position back. Definitely not following the rules, but it's just 'batting practice' while I wait for a home run setup.
13.42 was right after open and 13.69 was at 11:30. I am set my first stop at 13.43 then at 11:30 I happened to look and saw that SPY was well below support so I bought the 13.69 dip and put a stop at 13.70. I was hoping to hold the early buy overnight and was expecting to sell the 2nd one for 3-5%, but while I was away UVXY tanked. I was starting to think I had finally got in at the bottom of a multi-day rally and didn't want to sell out too early and have to chase the rest of the week.
I disagree - UVXY could easily gap lower with VIX dropping to retest 13.00. , or make a higher low. Overall, SPY is holding 442 support and VIX remains subdued. It would be different if SPY was at resistance like at the end of July.
I will continue the same practice as today was clearly not the beginning of a crash. Maybe tomorrow.
Agree but a VIX drop to 13 would only happen after FOMC. SPY could also break support which would trigger VIX higher. Anyway, I have a deposit to my account that will be ready for tomorrow to trade an extra zero, thus I was happy to buy at 13.30 today, versus a possible 14+ tomorrow. If I can buy under 13 tomorrow, that would be great and would simply stop sell all if it drops.
Here's an interesting read from Avi regarding last week's market action, along with his targets for this week. https://seekingalpha.com/article/4635706-will-fed-cause-mini-crash
In particular, he comments on how the markets rallied on Wed. and Thurs. with bearish CPI and PPI data, then fell on Friday with no news. He's still predicting a larger pullback, so keep that in mind as you make your decisions. I decided to buy some UVXY at 13.20 without a stop sell since I won't be watching closely and it's a small position. I don't want to be stopped out and have it reverse, and with FOMC on Wed., it's unlikely VIX will drop sharply and it's already low.
I bought UVXY 2x today and got stopped out for .01 gain each time. I got SOXS for 2.5% gain but lost 2.5% with KOLD. Still learning. I was busy and did not get my stop set with KOLD. I will be setting a limit buy at 58 for KOLD as it has strong support from the trendline and moving averages. As far as UVXY, I will continue to look for a buy early in the day with stops, however, I think I will only buy if VIX has actually broken a down trend. Today VIX appeared to do so, which is why I bought in. But it dropped all day and closed below the trendline and below 20 day MA. I could see go either way, so I will just wait for the breakout.
SPY barely moved today and stayed below 20 day MA but above the trendline support (442). So nothing has changed and there is no need to hold anything or guess. The market will decide VERY soon as trendlines are converging.
So, the big boys seem to have finished off their Friday game today, with a gap lower in the markets Monday and then buying. We're only 7 minutes in, so now just watch for a move past the early high. I'm going to stay alert for a reversal and maybe catch the bottom and more importantly, sell the top of SOXL since I bought it. Good luck!
Don't get suckered holding a stop buy at 14.00.
16 out of the past 16 Mondays the $VIX opened >2% higher than it closed on the preceding Friday. You can't buy the index but you can buy VIXY, which due to decay you do not want to hold more than a few days. Unfortunately due to the way VIXY is structured, the 16/16 VIX gains did not translate into VIXY gains every Monday at the open. However, it has led to a 6% gain over 16 weeks, and gives you the chance to be buying low at a possible huge run, while holding VIXY the past 16 weeks would have been a -35% loss.
It doesn't make sense to buy VIXY every Friday, but if the market is stretched and showing divergence, and VIX has started a new uptrend, it makes lots of sense. It's hard to imagine the market sentiment being any "less scared". CNN Fear and Greed Index has settled in the 70-80 range in an unusually calm plateau.
You could just sell at the open, or sell some, or set a trailing stop. I have a 20% position at 14.00. I am taking a huge bet that volatility is going to rise, likely starting with a gap up Monday. SPY has already gapped up to multiple resistance trendlines. If I am wrong and VIXY fades away, I will sell at < 13.68 which would be a break of the previous low 13.69. It would cost me a mere -2.5% loss on a setup that could result in an easy 10-20% gain or more. With VIXY there's always a chance it will go on a 100% rally like JAN2022, or 500% in MAR2020.
Good points. I've been watching the hourly chart for UVXY and waiting for uptrends to start. The last uptrend started Feb. 9 and was looking good until NVDA gapped the markets up and VIX down. A new uptrend potentially started that same day, Feb. 22, but that failed at 12:30 on Friday, Feb. 23. Normally, I would not recommend buying late in the day since the trend was clearly down. With SPX pushing above weekly resistance on Thursday and early Friday, then falling, the potential for a gap lower on Monday is high, which makes holding VIXY or UVXY a reasonable bet. They may however, gap lower and then push up strong like Jan. 24, so I will be watching to sell and buy early.
It's also useful to note that the lows for VIXY and UVXY are getting progressively closer to the previous low all year. (VIXY 14.43 > 13.94 > 13.78 > ?) 13.50 to 13.65 could be the next low. For UVXY, perhaps 6.80 - 6.90 range. I will continue my strategy of watching for an early buy and a move up on the day.
I guess it played out as expected with VIXY dropping slightly and VIX opening up 2%. Instead of selling at 13.68, I doubled down. It has dropped so far and it seemed to be holding. We'll see what tomorrow brings. I will continue to add until I get to a 100% position, then I will put in a -3% stop loss. It barely moved today so no chance to trade it.
Today appeared to be the start of a rally up in UVXY looking at a 30 minute chart. A gap up in the morning after a long weekend with the market teetering on support. If you bought at the open and set a 1-2% trailing stop, you would have been stopped out for breakeven. Same thing last Friday with the spike at 11:30.
Now with UVXY falling back to 8.40 support yet again, what's the decision? A gap lower at the open tomorrow? Here's where I think buying support doesn't work for UVXY. You only want to buy it if it is rising with a buy stop. On the daily chart, the downtrend and 20 day MA put resistance at 9.00. On the 30 minute chart, a different downtrend puts resistance at around 8.60 to 8.70 for Wednesday.
Also note a few patterns:
1. A gap up in UVXY is almost always a good buy signal. You may think you have missed the buying opportunity, but buy anyways and it is usually rewarded.
2. Most of the spikes are preceded by a flattening or rounding bottom, then either the gap up or a strong day up. Both should alert a buy signal.
Caution: it is difficult to see the intraday volatility on these daily charts. There will be times you get stopped out by a 1 or 2% stop, then it goes right back up.
I would add:
1. You can usually put in a slightly lower limit buy than the indicated pre-open price and watch the open, giving it 5-10 minutes to reveal some 'character'. Buying at market can sometimes then have you sitting 1-2% down within minutes and wondering if it will reverse. I'd rather give up 1-2% from the open, grab it moving up and able to quickly sell if it reverses.
2. Agree, once VIX has well and truly bottomed for several weeks or months. Prior to that, like now, strong days, like Nov. 14 can be brief, so best to take the win. I stayed long that day since I was biased, expecting the markets to drop. That bias had me looking the wrong way and missing a long move.
I think the message from these daily charts is to ignore the intraday volatility. Anything less than 5% is simply 'noise'. It's best to be well rested and ready for the next stretch of UVXY trading when it comes, which could be in 3-6 months.
Nice addition with the daily charts. You didn't mention this but there are several false starts on the daily charts. It you follow the rules and sell for -1% or -2% a couple times in a row don't get discouraged. You can see on these daily charts that this strategy soon pays off with +20% to +50% which more than compensates you for the handful of -1% days. Nice work!
UVXY did not quite make it to the lower BB yesterday. Now it would have to drop to 11.81 today. I will be watching because it may cross the 20 hr MA first.
I was able to buy 2nd half of TQQQ position yesterday, and 100% position of SPXL in my margin account. We'll see if we can get a rally today so I can set stops to breakeven. TQQQ needs to get to 41.20 and SPXL to 85.63.
I made one more attempt on SA to comment about trading TQQQ and only got negative feedback. I have cancelled my subscription and will keep in touch with you here. I haven't learned anything valuable from SA for 3 months since I discovered you. Good luck this week.
Great job buying more TQQQ yesterday. I saw it under 40 and nearly bought, but didn't. I did buy SOXL but sold it later for a small gain. I was simply too worried about a potential drop with the CPI data today. Too bad you didn't buy TNA. I thought about buying it too.
UVXY was a really difficult trade today. I did buy but it was really difficult to stay with it as it went up with the markets. Now it's flat with the markets sliding lower. I'm feeling compelled to hold now. I also bought some PSQ to sit on today. Selling some individual positions that I bought back yesterday. I also finally bought some SOXS at 8.75, up from 8.66 and TZA as it held around 30, then was stopped out at 29.85 and re-bought reversal.
I hate to suggest selling your positions and taking the windfall, as they may continue higher, but QQQ is nearly back to its July high, and isn't likely to just roar on higher. SPX might gap higher tomorrow. I don't see a big reversal coming and will likely sell SOXS and TZA today. XLK made a new all time high, which I was expecting to come soon. The more I think about it, the more I think you should hold as TQQQ and SPXL are only up 5.6% and not 13% like others. Congrats!!
I couldn't buy TNA because it was still in a downtrend. Then it opened too high. A gap up is generally a good sign, but an immense gap up after a huge rally is risky. I actually went against my rules and sold SPXL and TQQQ today at $87 and $42.67 respectively. I should be waiting for a sell signal, but I wanted more than paper gains to start out my new strategy. It somehow gives me more confidence knowing I have a buffer of a profit so I can feel good going all in 3X again next time.
Plus UVXY fell below BB so I wanted to buy some as it seems to be a 70/30 probability this rally will take a quick 1% drop and I will get at least 4-5% on UVXY. I went big on UVXY again - 10% of my account - at 11.61 following my rules and your rules!
It is strange when UVXY moves up with the market. It generally means people feel we are at a top and as the market goes higher they are willing to bet on more volatility. This will usually lead to a rollover top in the next few days.
Also, we are at the top of Avi's range for this rally. I still have some respect for his calls.
Finally, SPY has 3 recent gaps to fill. Usually 1 gets filled within a few weeks, a 2nd within a few months and the 3rd maybe never. There, now you see why I took the profits. Hopefully UVXY goes to 20.00.
I haven't seen any numbers from Avi since Oct. 30 when he became much more bearish, so for me, he completely missed this run up. He's also been calling for a major run in gold and miners since the start of the year. I also still respect his calls, but ignoring them and trusting the simple trendlines would have been much, much better. Likewise, JC can get one looking the wrong way and in too early. He's been repeatedly early long and short the past several months. On this last move, he got out of his long too early and is now deeply underwater short, granted with just one half batch buy.
Are you going to stay on SA for messages and free use? Messages there are easier for us to follow versus comments here.
Locking in a cushion for your next trade makes complete sense. Sticking to rules though generally provides the best results. Being content with the gain and waiting for a trade the other direction also makes sense and follows your rules.
I bought UVXY at 11.55, stopped out at 11.50 and back in at 11.60. Out at 11.85 and stopped in to a smaller position at 11.92, out at 11.85 and forcing myself not to buy. VIX has plenty of room lower and could fall even with a small gap lower in the markets tomorrow. I would take the win with UVXY as well. It's a momentum trade and there's no momentum now, just flatlining and the markets are consolidating and holding the gap move. UVXY will hit 20, but it might hit single digits first, which I think is more likely. And the rule says don't hold unless you're up 5% or more by the close.
I appreciate your perspective on UVXY. How tight were your stops? I just waited for a decent sized green bar on the 15 min chart which gave me 11.61 and it never went below 11.60 once I bought. I am up about 4% on UVXY so I held overnight. A gap up in the market would be a 5th unfilled gap and 99% likely trap.
I will see if SA works for messages only because I agree the format is better.
Nice pop in UVXY to close giving you a better cushion. I actually sold at market at 11.50 since I saw it dropping and the early low was .49, the high was .57 and markets were pushing up. Setting the stop buy at 11.60 was rather aggressive but I felt it made sense. Later sells were also at market, hoping to get out with a small gain and have it fall, but it never fell. After 2 attempts, I decided I wouldn't re-buy again. I'd rather miss a gap higher with UVXY and have a chance to buy something long and have it move up over the day. Holding UVXY could have me taking a loss (again) and seeing the long options at even higher prices (again). I also looked at the Nov. 1-3 bars and figured we could easily get that again. There's also no gap on the weekly chart and it's "back in the lane". Some sideways days now would reasonable.
I was not expecting UVXY to make a rally today being Friday and it mostly bounced around. The 15 min Bollinger bands were perfect buy/sell points today, but I did not attempt any trades. Instead I focused on SOXL as it was often near support on Bollinger bands across almost all time frames. I made several trades, mostly breaking even as I set stops only once I was up 1% or so. Total on the day I only made about 0.1% but better than SPY again. Also no trades were losses.
SPY is at critical support so no reason to hold UVXY over the weekend, though tempting. Looks to be another test of the 200 day MA which is still rising. Actually closed under it, but I would expect major whiplash next week in a range between 416-424 and crossing that 200 day MA many times to confuse everyone.
I gave UVXY the benefit of the doubt all day, got the early rally and sold, got a bit on the noon rally and sold, then took 3 swings around 1:30 from 18.50 and third time was the charm. I put in a sell at 19.90 for a late rally or content to hold over the weekend. I was skeptical of SOXL all day but took 2 trades for 1%, one for 1.4% and one for 2.5% and bought some back late at 16.64. UVXY and SOXL don't directly conflict so it can make sense holding both sometimes.
Agree, SPY is at critical support, but there's a lot of downward momentum. It might open Monday at 416 to start the rollercoaster week. UVXY also looks strong on the hourly chart, and not way overbought like last Friday.
Were you watching today closely? There was probably 50% total moves up and down! I bought at open and survived the first dip to 16.60, but not the second dip. I got stopped out for no gain while I wasn't watching. Checked back in at lunch time to find UVXY range bound around 17.00 and decided to stay out with SPY not too far from $430 support. Today could have been really bad or really good depending on how you played the 5% rollercoaster swings. I didn't make any other attempts as I saw the market was not having a selloff. I was likely not going to make more than 1-2% and probably likely to breakeven.
Overall this seems bad for the market to have got down to SPY 430 again without even putting the gap or downtrend resistance to a test. Bulls will say this is a double bottom setup. However, we are clearly still in a downtrend and going thru whiplash. There is no reason to be in the market right now.
I'm satisfied with following the rules and not losing anything while SPY lost > 1% today.
And we thought yesterday was difficult!!! Today was nearly impossible to trade. I wasn't able to watch things closely and repeatedly nearly bought or just missed the UVXY lows. SOXL looked nearly the same as yesterday early, and I had sold and re-bought, just like yesterday, but I didn't believe it would make a strong rally again so sold the reversal and remained skeptical all day. I also decided to hold some UVXY overnight. I agree, the markets look likely to go lower. I was skeptical of the moves Monday and Tuesday.
Today was similarly choppy. I broke even on a few SOXL trades. I am glad to have lost nothing while SPY is down 1%. UVXY only likes to rally while I'm working! UVXY seems to bounce off Bollinger Bands, but varies which time frame. You could buy bounces off lower BB if multiple time frames coincide such as 2 min, 5 min, 15 min, 30 minute all being within 1%. Take a look. Also could be used with SOXL. I've been trying to find a way to buy lower instead of waiting for a 20 MA break so as to reduce the -1% stop losses.
For selling I would still use a trendline break. Prices tend to "hug" BB on the way up for up hours/weeks/months. Prices sometimes "hug" the lower BB too so that is why I am thinking multiple time frames need to align for the buy point.
Yeah, today was difficult again. I did okay but was leaving so played it cautious. I managed to buy the 1 o'clock reversal and decided to 40 minutes later, coming down from 18.03 and leaving for the rest of the day so couldn't trade. In hindsight, I should have held or at least put in a stop buy at 18.15, but that plan didn't work out earlier at 12:30. I was late seeing the move so went with a high stop that I figured wouldn't get hit unless it was really going to move. It made a 6.9% move from 16.98 to 18.16 in 15 minutes. Ridiculous! I was stopped in by a penny at the top. I bailed 5 minutes later at 17.92, it fell all the way back to 16.93 and then ran up to 18.03 and I sold again at 17.92 for 3.6% (saw the reversal late). I left 10 minutes later and all looked good, it continued sliding for another 10 minutes then went up 8.8% and this time I didn't have the stop buy at 18.15. It amazes me how moves happen like someone is watching what you're doing and they're specifically messing you up!
Best is to simply not care about catching moves on chaotic days like the past 3, or simply hold Tuesday's early buy with a very loose stop to keep you in. Even Wednesday would have kept you in with a stop at an early low buy price. Today was more difficult because it broke the early low twice. Good experience as to what's required to stay with a UVXY trade for a full run when the markets drop. Now we'll see if they can hold support and rally to a new high.
Tough day. Bought SOXL at "support" 19.01, then broke the rules and bought more at 18.50. Then got stopped out at 18.36. Also bought UVXY and got stopped out for 1.1% loss. At lunch time I found out SOXL was back above 19.01 and could not believe the reversal. Stayed out the rest of the day.
I am almost back to breakeven now due to all the stop losses adding up. But I am following the rules better lately. Despite losing on 80% of my trades (stopped out or not following rules) I am still beating SPY since SEP because I've caught 2 or 3 of the UVXY rallies. And that's really all you need to do.
I still feel like this is safer than holding SPY or QQQ because I can wake up tomorrow knowing I'm not going to be down 5% unexpectedly. Also I'm getting used to selling for a small loss and not accepting the risk of larger losses.
I expect this strategy to provide 10% per month on average. Last month was 18% and this month about -15% so far (did not follow rules most of the time). I'm going to make this work.
Yeah, it was a tough day, but could have been easy. You obviously bought SOXL pre-open at 19.01. I sold just after the open at 18.51 and put in a stop buy at .60 after it fell a bit. Normally I would have bought near 18 as it held but I was determined not to over trade and get sucked in buying and then taking an additional small loss on a drop. I happened to be watching when it shot up so I grabbed some at market and then it triggered the stop buy while I was wondering what to do. I then sold as it fell from the high at 12:30 so did okay, but it was a small position.
I bought UVXY at 16.25 as it was moving up from .19 in the first 5 minutes, then was stopped out at 16.15 on the brief spike lower. Grrrrr...., and I bought half back the next minute at 16.34. As it approached 10 o'clock, I sold as it dropped from 16.66, got .62 with half and stopped out at .50 with the rest. So, played it mostly right. I then bought some back at 11:30 since I was going outside to work and it was back to yesterday's low and up from 15.56, got 15.63. I happened to see it as it was moving up from 15.17 and decided not to add and went back outside. I would have bought for sure if I had been watching. An hour later it was up to 15.73 and stalled, and I was in for a quick check so I sold. Grrrr...., and it went up 4.5%. I finally decided to buy back the small position in both UVXY and SOXL, so the same holding as yesterday and made a bit trading. Could have done much better if I'd been watching. Oh well, part of the goal is to develop a system that doesn't require constant watching.
I completely agree with your 10% per month target, but there will likely be months in a row without a solid 10% trade in UVXY if the markets are able to gain traction and move to new highs. SOXL will likely provide it then and I'll be content to get less during those periods, knowing that I'll be able to get more when the markets drop.
Nice update. With the VIX bounce Friday, it has cemented a higher low. I am reluctant to believe it myself as it is hard to buy something up 20% in one day and hold it over the weekend. However, I have stated myself that VIX was at 17 and that was a starting point for every bear market. In addition, a higher low was also a prerequisite for every crash. The fact that SPY barely moved is curious, and makes me suspect a gap lower Monday morning because it "held" support Friday.
Ultimately better to be safe and in cash. Then play the daily move and walk away each day win or lose.
I did hold some UVXY from Friday, mostly as punishment for not catching the big move with a large position early and sticking with it all day. Today I was happy to give back some of the gains for a chance to play it better today. I sold it at the open and bought some SOXL off the open. I've let it ride and was watching to buy more but didn't. Should have on the dip but okay that I didn't, since I also have shares from Friday. I bought UVXY at 16.88 as it moved up and left a stop at 16.80. I came in to today with a better mindset to trade much less and have it set so I put in the pre-open prices and know where 2% up and down are. That helped a lot. I'll continue to watch for a possible reversal but focus on trading less. Have a good day!
I'm guessing you were stopped out of UVXY. I bought SOXL pre-market at 19.00 then sold for 19.19 also pre-market as I wasn't going to be around at open. I can't set stop limits pre-market. Then I set another buy limit at 19.01 which never triggered. I was quite busy today and not able to watch, but I see there was really no trading to do anyways. I should have just held SOXL. At lunch I saw it was topping out and decided to stay out. I will buy a pullback tomorrow as I like to buy SOXL off support around 19.20.
UVXY: easy to stay out all day as it never bounced or broke 20 MA on 15/30/60 minute candles. SPY looks headed to fill gap at $439 and test 50-day resistance (also downtrend resistance). This is when UVXY might turn so be ready.
I sold UVXY at the open, re-bought early reversal and sold for breakeven on stop, then happily watched it slide. I bought some SOXL early and held it all day. I thought it might finally break higher, thought to sell at a top but stuck with my plan to let buys run and not over trade. I'm surprised how big the market reversals were, over 1%. No predictions where they're headed next and will simply watch for early moves.
VIX has dropped back to 17.45 which is incredibly low. It could still bounce from trendline support. However, if it falls again Monday, it will likely be heading back to 14-15 or lower. Monday seems to be the perfect opportunity to buy UVXY early and set a 1% stop loss. Everyone is suddenly bullish because it seems the market didn't crash after all. But we are still in a down trend and volatility should be expected below SPY 440 especially below 430. If we get to SPY $438, I will be looking to buy UVXY at support.
17.45 VIX is incredibly low relative to what? Last Friday early was 15.83 as the markets gapped higher and fell. I suspect Monday could also be a gap and a move in the opposite direction. From the comments by JC and others, they've been bullish for weeks. JC made his first UDOW buy on Sept. 13. (Another example of buying early and riding it down 14.7% and buying more en route.) Robert at PAM has also been bullish and expects a rally to mid October. He's really difficult to follow, but there's a lot of bullish in the small fish and the big fish stepped up on Friday. What happens next, as always, is entirely up to them.
I was thinking of writing an article this weekend on the theme, "Better to be a day late, than weeks early." I missed buying SOXL early Friday which was a very easy setup for 10% on the day. Now I need to be ready to take whichever setup comes Monday, whether it's SOXL/S and UVXY. Friday's move seems excessively large, but the move on Oct. 13, 2022 was also excessively large and it was the start of a long run up. Good luck Monday!
In comparison, VIX was 17.08 on 21FEB2020 and 17.22 on 31DEC2022. Also 17.83 on 30MAY2008. The point is, historically VIX at 17 is very low and huge crashes have happened from these levels. More and more I am only interested in day trading until a long trend is re-established for SOXL.
13OCT was followed by a great short trade the next day. The actual confirmed bottom for SPY was 21OCT when the 20 day MA was held as support and began rising. In addition there was divergence in RSI, MACD and MFI on daily and weekly charts. Finally the OCT bottom also coincided with 200 week MA support. Today is not similar so I am looking for SPY to reclaim 20 day MA and $440 before holding long overnight.
Great title "Better to be a day late, than weeks early." AKA let someone else find the bottom.
Good points all around. For people new to VIX and trading UVXY, it's good to realize that 17 during a period of weak markets is low. When markets are in an uptrend, VIX is generally below 15 and buying then and waiting is a terrible idea, as proven by the author of a June article on VIXY. He's still underwater since buying and holding then.
I am definitely watching for a gap up and drop tomorrow. Having a firm floor as a guide going forward is very helpful. QQQ and SOXX made their low September 27 and have had higher lows since. All in all, there's finally some confirmation of a bottom so taking a hard shot long on the next pullback is a good idea. A month of elevated volatility is also quite a lot.
It's very helpful that you're looking back through the history to give another perspective. Thanks! JC first bought SOXL and UDOW nearly 4 weeks ago, and my thought at the time was it seemed early and optimistic.