A Correlation Check With SPY. VIX. & CBOE.
I usually perform what I like to call, "Correlation Checks". I do this on a Daily with SPY & VIX to understand when is a good time to either look for trades or sit on my hands. Whether to Play Calls or Puts, or whether or not I will decide to swing a trade overnight.
Usually VIX likes to bounce in between 15-21, so if you understand this, you can have a higher probability of "timing" the market at support of 15 and the resistance of 20-21. However this is more of a birds eye view of the correlations.
The Chicago Board Of Options Exchange(CBOE) & SPY Correlate the same while VIX moves the opposite way. Since the initial announcement of what we've titled: "When the world shut down". The market has continued to put in ATH's.
There has been a ton of volatility in the markets since then and especially since the election(Nov 3rd).
At the same time, VIX which we know is the S&P 500 Volatility Index has been printing lower highs since the election. Now closing below pre-pandemic levels as of last week. Keep in mind that VIX may find support sooner or later.
CBOE has struggled in the 130s before & SPY is creeping on a new ATH, however it was after a well extended move over the last week, which started during the 2nd week of October after the end of the month dump in September. I timed the turn nicely and went 11 for 12 on my swing trades so far in Oct. I played SPY on the way back up as well, grabbing 440 calls, 445 calls, 452 & 454 calls. It has been indeed a good month so far.
We are heading into the end of the month so things could get a little turbulent.
Usually VIX likes to bounce in between 15-21, so if you understand this, you can have a higher probability of "timing" the market at support of 15 and the resistance of 20-21. However this is more of a birds eye view of the correlations.
The Chicago Board Of Options Exchange(CBOE) & SPY Correlate the same while VIX moves the opposite way. Since the initial announcement of what we've titled: "When the world shut down". The market has continued to put in ATH's.
There has been a ton of volatility in the markets since then and especially since the election(Nov 3rd).
At the same time, VIX which we know is the S&P 500 Volatility Index has been printing lower highs since the election. Now closing below pre-pandemic levels as of last week. Keep in mind that VIX may find support sooner or later.
CBOE has struggled in the 130s before & SPY is creeping on a new ATH, however it was after a well extended move over the last week, which started during the 2nd week of October after the end of the month dump in September. I timed the turn nicely and went 11 for 12 on my swing trades so far in Oct. I played SPY on the way back up as well, grabbing 440 calls, 445 calls, 452 & 454 calls. It has been indeed a good month so far.
We are heading into the end of the month so things could get a little turbulent.