In this edition of who is getting hammered, its the Godfather himself. As I'm sure you've realized, DO NOT long VXX or UVXY at the highs...they are intrinsically designed to go down and kill the majority of traders who try and greedily make fast money. In all my past posts, we have witnessed the sleeping giant, base, chop, and create inductions. Finally 2 weeks ago we were rewarded for our patience at the support. Hopefully the post 3 weeks ago prepared you for that spike because in volatility, when its over; its over. Now that we have established that anyone who doubled down over last friday's VIX pop was borderline crazy, hopefully this week you can remember to relax and let VVIX get some sleep. When I say sleep I want you to realize that support and liquidity are relative terms when charting volatility. This territory is difficult and often disheartening to those who think VVIX or VIX can be charted with normal TA, it can't. All the tools we use elsewhere have a smaller place in figuring out trend for volatility. Liquidity, commodities, DXY, OIL, even Crypto has its place when watching sentiment, liquidity, and trend. you cannot directly trade the VIX or VVIX, but understanding how it leads tools such as UVXY and VXX is the key to becoming a volatility trader. While I have appreciated all the comments and messages, I am in no way an expert or an authority on "volatility" but merely a student, as we all should be.
I genuinely hope many of you read this all, simply because after 10 years of trading and watching my account be blown up trading with a bias, I have learned to trade without bias and treating trading for what it is: a business transaction. Simply buy, sell, or hold. Its as simple as that.
Now for the Meat:
SPX recovered over 4% this week after dropping 3% the week prior, not surprisingly this move was done on a decrease of volume. The "pump" has become weaker as more and more people dive headfirst into the market (RIP WSB/ Melvin Capital) with no regard that stocks will always recover dips. To that point, its been that way for almost a year now and with the final pump of stimulus coming, the market may indeed see 4000. crazy to think we would be here, but we cannot stress over what should or shouldn't be. Be a fool, trust price. Right now as it stands VVIX will push to the bottom support which currently is between 99.50 and 100.75. This lines up with a recharge for volatility as it was crushed back to the levels it was prior to the peak, however do NOT be tempted to buy this initial dip in VIX or VVIX. Instead wait for a bottom to chop and retest the 200 ema here. Should the 50-200 cross I will update the changes that may bring, however that has yet to happen. Should we break below the support I believe VVIX will find, things make get crazy and SPX may find 4200 fast. this would be an ideal situation because we will be ready to load shorts and volatility. for now? stay away or play individuals smartly. As always trade smart, emotionless, and please FOLLOW PRICE. Expect zero on every trade. Only YOU know your own risk. Cheers.
I genuinely hope many of you read this all, simply because after 10 years of trading and watching my account be blown up trading with a bias, I have learned to trade without bias and treating trading for what it is: a business transaction. Simply buy, sell, or hold. Its as simple as that.
Now for the Meat:
SPX recovered over 4% this week after dropping 3% the week prior, not surprisingly this move was done on a decrease of volume. The "pump" has become weaker as more and more people dive headfirst into the market (RIP WSB/ Melvin Capital) with no regard that stocks will always recover dips. To that point, its been that way for almost a year now and with the final pump of stimulus coming, the market may indeed see 4000. crazy to think we would be here, but we cannot stress over what should or shouldn't be. Be a fool, trust price. Right now as it stands VVIX will push to the bottom support which currently is between 99.50 and 100.75. This lines up with a recharge for volatility as it was crushed back to the levels it was prior to the peak, however do NOT be tempted to buy this initial dip in VIX or VVIX. Instead wait for a bottom to chop and retest the 200 ema here. Should the 50-200 cross I will update the changes that may bring, however that has yet to happen. Should we break below the support I believe VVIX will find, things make get crazy and SPX may find 4200 fast. this would be an ideal situation because we will be ready to load shorts and volatility. for now? stay away or play individuals smartly. As always trade smart, emotionless, and please FOLLOW PRICE. Expect zero on every trade. Only YOU know your own risk. Cheers.
Comment:
^^ the meat has been simmering here all this time. Do you smell whats coming?