Today was not a really good day to day trade, but I did make one trade. It sort of illustrates how to use a breaking down VIX to find an entry for “stupid longs”.
Above is the trade I made, using “Vix breakdown below 43.20” for entry on FAS just under 9. And here’s the thought process documented on StockTwits…
http://stocktwits.com/u/thehawaiitrader/1152509484
Despite a choppy tape, made the call on FAS. It was bold and stupid, but it made it. Lol.
Day high on FAS was 9.55, which occurred in final 30 minutes of trading. Was expecting a better breakout. Oh well.
One final note: the VIX is approaching a key support area using a 15-day chart. I used today’s rally to exit some swing longs and enter new shorts. I’m not the only one who spotted last week’s funky Vix reversal. Someone tipped me off to EvilSpeculator’s post on the Vix yesterday, which uses Bollinger bands and other fancy stuff.
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You have very intriguing trading approach using VIX and apparently very successful one. Congrats.
That someone who “tipped you off” was me you moolie.
ha. thanks Blue. my mind is all over the place. i always appreciate a good lead down the rabbit hole.
Gio…
you are a master sensei.
today i learned the bad way since i lost my grip and overtraded.
Ill pay mroe atention to the VIX.
It was a good break and the 5 min bars showed good resistance at 34 ema. End of day VIX correlated to market, price could correct up a bit, more likely fear as say G to the I to the O. 200 ema only 2-something percent away, if 1200 NQ 850 SP breaks it could make for waterfall. Weekly VIX is 13/34 ema bound boundarized, boundarazzamatazzized.
manatrader … i think the VIX is gonna spike hard down tomorrow. yikes! I’ll be looking for a reversal to fade bank plays, but yeah, if its a “waterfall” then it will be tough.
Whoa thanks for correction –
Well, I don’t want to say exactly what the VIX will do, but I do know what I am looking for… spike down, then reverse up providing an opportunity for a day trade short. If it doesn’t come, then I won’t make the trade. It’s basically a play against the herd if the herd is complacent. In my notes I have the VIX losing strength since last week Thursday.
btw, boundarazzamatizzized is cool.
Nonsense is my ace, my trading? A deuce! That’s fine, I only need a pair. Oops wait. Shucks
Did you catch TCA’s post/tweet on the fins action after-hours?