As you know, I’ve been dumping longs and moving to shorts ever since the VIX hit my medium term transition target of <34. When it got too close to 30, I dumped almost all longs. This is the hardest part that many traders have… transition from short to long and vice-versa. I can never tell you the exact top/bottom, but if the VIX gets to a level where I feel people are getting too complacent, then I’ll make the transition… transitions can take days, but usually I’m not too early.
Sectors I’ve been eying to short are retail and energy, more specifically, online-retail/travel and solar-energy. To give you some ideas try…
NILE, ZNH, FLWS (too late), LULU. Avoid shorting stocks like HANS, GMCR. They are BOTD candidates, so they can cause trouble to shorts.
Energy, you know the solar names. They sure are getting hit:
STP -14%, SPWRA -7%, YGE -14% are top 3 swing shorts. I haven’t shorted these yet.
Going back to the VIX, it only went up 5%, but notice the intraday trend is up, so I expect it to go higher in a few days. However, a slight pullback closer to 33 would be another good entry to add to shorts, but if it does dip past 30, then it’s time to redraw our “vix levels.”
Aloha!
-gio-
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Other “retail”: GES, MELI, NFLX, TPX
Gio,
What is your long-term outlook on HANS, if any? Thanks, much appreciated.
Dude… Solars hit is an understatement lol I lost a little bit of my ass in my SOLR Q1 Earnings Swing Trade idea.
VIX didn’t break 34, which I would have shorted @ if it did. I’ll chill with my two positions in TRE and CCC for now, but truth be told, today would have been a nice SMN long day; UYM is looking a tad tired.
Nice Gio,
Been short NFLX since 45 it is paying well. Ultimate target is 34 🙂
Happy Trading,
JFF
@zmoose… i meant when VIX breaks below 34, sorry. it’s a contrarian indicator so my entry points almost 90% of the time are counter to trend, for example if market moving up, then i will SHORT when VIX gets UNDER a number, and if market moving DOWN, I will LONG when VIX gets OVER a number. confusing stuff.
Thanks JustForFun… had two short limits on NFLX that both hit: 45 and 40 just today.
I got out of FLWS longs just yesterday because I was smelling these flowers and it made my allergies go crazy.
@jrich … target on the long side is not that great. I’m using its 2007 high, =67 as a very powerful resistance point, meaning all the other resistance points below that are strong too. we’re getting close. When I say avoid shorting HANS, I mean that shorts will be wasting their time for now (look at price/volume action in the past few days, too strong, it will either inch up or consolidate for a long time in a 10 point channel), so they would be better off shorting stocks that have, say, rallied closer to 200MA on low volume.
Short the Lakers
Long the Celtics, Bruins, Red Sox, Patriots.
Greatest sports town in America..hands down!
Portfolio update:
Long Magic
Puts in Celtics… far out puts.
Calls in Lakers
Short Red Sox, Long Steriods for a pair trade.
Buying Dodgers on the dip
Short Tom Brady, Long Cry babies for another pair trade.
I like the way you use the VIX. Thanks for your commentary.
Great stuff Gio
Thanks Gio.
I agree with the Dodgers.
Ill take some calls in the Cavs
Thanks for your analysis Gio. Is anyone aware of an ETF that gets you short solar stocks? I’d like to keep an eye on that, if it exists.
@Rickets… I don’t think there’s a direct inverse on solars, but you could just short TAN, which has a variety of solars in it- it’s heavy FSLR and SPWRA though.
Danny,
I just discovered you site. How do you draw chart to figure when vix is telling you to go long or short.
P.S.
I’m on the big Island!!
Greatest sports town in America..hands down!
“Town” maybe.
City?
Nah.
Best,
The New Yorkers
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