For those of you following me, I issued a warning last Friday that the Vix had completed its double spike pattern up to 80s. The first confirmed “spike” was on Wednesday at the open, the second spike occured on Friday’s -500 premarket panic. I originally thought Thursday was a “spike”, but it was more of a trend up.
Anyway, last night I posted a video (http://ibankcoin.com/gioblog/?p=2168) for possible trading ideas based on my Vix-Double-Spike theory. My key plays were to short the inverse ETFs. Take a look at them…
[[skf]]
[[fxp]] ..wow!
Or you could have go long any stock in the universe.
Right now I am holding a massive day-trade long in Petrohawk Energy Corporation [[HK]] as outlined in my video. Notice the key triangle wedge formation I noted there.
I am also short SKF, and will continue to hold this as a swing trade.
Right now the Dow is heading to the 8% territory. So now do you trust the Vix Theory? Its at least great for using to find key reversals, even on the short term charts.
Finally, I am starting a new study with The PPT merged with the IBD100 list. I will let you know when I get a correlation in trends there. Should be great stuff!
Aloha!
-gio-
Skeetish
Whoa.. check out my day trade on HK in the final hour! lovely. Closing it out. 😉
Thanks for sharing your knowledge about vix – at least two times in the past you have issued the warning and it worked both the times! By the way, really sorry for replying late on http://ibankcoin.com/gioblog/?p=2143#comments . I just wanted to make sure you read the comments as that post is old now :). I traded wrong picks today sol and feed – didn’t get any profit yet. Congrats for your profit – I hope to learn more from the videos.
yup, wish i listened yesterday… i could have got out with fat 500% & 950% gains on SNE/FXI had i just placed that order. oh well, cashed out today…225% & 550% gains. so, what was the plan tomorrow? if the FED cuts and market shoots higher? would that be a way to get in more puts?
Usually the major reversal comes between 1-3 trading days after a confirmed Vix spike warning. Its tough to get it the day of, unless you get a spike intraday. However, using the Vix this way can significantly give you an edge over, I’d say, 90% of traders. just read everyone’s blog over the past weekend… bear bear bear bearish! Even I was a little bearish, but stuck with the trading rules on the Vix… namely the golden rule: “do not short stocks after a Vix double spike”, where the spike = relatively high move on the 1-month chart.
Remember, if you’re uncertain on how to trade using the Vix or any tool, then just average in and set stops. hope this helps!
Geo catches the THE BIG WAVE! Congrads!
tim says we rally from here on out. i say beware of the GDP this thursday… altho if Tim is right, it will be nice to have a firm direction. I think after Nov 4, we will pick a direction for sure. but congrats on the VIX study.
Check my Vid yesterday. My target for HK closed at it EXACTLY! 15.06. wow wow weeeee. although you can’t hear me saying that was my target, i did highlight it with my mouse. Lame. oh well, i’ll figure this software out soon.
10q crude.
stuck… i’m planning on shorting tomorrow if the market opens up. Thursday is my target for swing longs, if the GDP does indeed take down the market. at least we have a good temporary bottom on the Dow to set our stops to. Vix has a lot more down to go, so I still wouldn’t beat against this rally.
i too hope for a spike tomorrow, if only to get my FXI put back to where it was. otherwise i might just get some guaranteed cash distributions. from Canadian Energy Trusts. They are so cheap and still paying out the same amount on their dividends.
i am glad to be back in this market. i missed the huge slope. maybe i can catch the freak rally… Nov 4th is the date IMHO where things firm up.
NBA is back tonight… too bad i am working…
when do the lakers play?
congrats on the vix gambit!
thanks scum. last time i nailed a key reversal with the VIx, the Dow rallied over 1,700 points. Hopefully we get the same strength.
Nice call, again! I’ve had the Vix on my watchlist and it has helped with gauging the market sentiment. I want to see massive gains on that SKF short!!!
Hi OE! thanks for visiting here. you should come more often and contribute some of your options plays. they’re getting a little tricky in this kind of volatility, no?
Thanks for all the recent Vix posts. I continue to follow your work. Lakers and Portland tonight.
VIX is in the process of putting in the right shoulder of a Head and Shoulders pattern. Look at a 30minute or 1 hour chart. This tells a pretty powerful story. VIX target = 21.50ish.
Gio, you’ve got brass balls to call for those SKF/FXP shorts and then actually short them.
Awesome trading!
Hi slomojoe… i’m not sure the Vix gets that low. I will, however, use a double spike to the downside as a sign to start shorting again. nevertheless, that would be a great HS pattern if it develops.
anyway, here’s the post on the Vix double spike I reemphasized last night:
http://ibankcoin.com/gioblog/?p=2163
… interestingly, no one posted any comments!
thanks shed… i wish my balls were a little more bigger, then i would have shorted EEV too.
Gio,
What’s your take on this obvious contraction in the VIX? I think this will mark an interim low, until the Oct. 10th gets tested again. I hate to think like that, but it was really disappointing to see that intraday low not challenged at all. I mean, we came so damn close, but never made the final run at it. Hopefully we’ll see that happen, with a firm hold, and the typical VIX one day upthrust that has given us a clear signal that a temporary (at least) bottom was put in.
Slomo… there was a huge spike to the downside intraday that brought the Vix to the mid 50s. I’ll use that as an intermediate target. I probably won’t feel comfortable shorting again until we get back under 55. When that day comes, I’ll be back for more volatile day trading on the short side.
…also, be aware that I always “update my Vix charts”, meaning my Vix numbers are relative. its a complicated process, but its related with a number of other contrarian indicators as well as the price performance of the Dow, SPX, and NDX.
i would suggest not getting crazy long two days before a big news event. right now on my notes, I have the elections as a big news event, so i will be trading more cautiously during that time. sometimes, news trumps technicals so we have to always be aware of that.
Thanks for the pearls of wisdom, I too watch the VIX like a hawk. That thing has been pretty jumpy lately. Art Cashin said something this morning that was interesting, it was something to the effect of the market would most likely rally above 8600, and then a strong selloff would come in the near future, taking us to new lows in one fell swoop. He actually mentioned the run up being a classic “elliot wave” one. I love that guy, he’s the only one who’s not completely full of shit.