The Godfather prepares

the sell COMES. None of this rally has quelled the underlying fear in the market. It does not have the power, nor the sentiment that the majority of traders think it does. After the steady grind over 3750, SPX has been diminishing in strength as it goes up. Volume has silently tapered off and liquidity is near empty after the last push today. I am now beginning the accumulation of Volatility and Puts out 4-6 weeks, which is the longest I can see this grind up going. that does potentially give SPX the room for 3910, however that chance is smaller by the day. Do not be fooled with the ramps going into close most days this week. As we watch the changing of guard in the political realm, understand that there will be fireworks and things unseen.
In technical terms we have seen VIX, VXX, UVXY, and VVIX himself, hold the support each time it is tested. Even after a torrent rally today, DXY and VVIX have remained elevated. Don't be alarmed to see VVIX below 110, however if breaks 100 be ready to fully position yourself long. Time will tell, but the next 30 days should be fun. best of luck. Cheers.

Comment:

well well well, I was certainly positioned for well over a 2 weeks expecting a push in volatility, however even I was caught off guard by the 64% VIX jump in one day. Boy those march lottos for VXX paid well but not nearly to a level I shouldve been positioned for. Hopefully all of you had the necessary positions to not complete destroy your portfolios, if not, this week seems to have made you all your money back and then some. I will update on a future move, and while I am not as confident in the terminal price of 3910 i posted above, the rally that just took place was very unimpressive in terms of price action. Ill explain further in another post.