Fear is back in the market! Today we got our first Vix spike up off of retail news. You should probably be covering some of your shorts here since you want to be shorting at complacency ( Vix under 40) and covering at fear (Vix above 50) as a general rule. This spike up on the Vix is actually bigger than appears, simply because the Vix has been consolidating for a while (translation = dead, boring, sleeping, impotent).
Anyway, so far it looks like this week the first card of the flop is now a Queen of Diamonds. That’s a huge upgrade from yesterday’s Two of Spades. I don’t know, it’s still murky out there, and I still have the same sentiment on the market: cash is two aces, but shorting is the winning side under the 200 and 50 day.
Well, at least with the Vix back we can start looking to trade the volatility. I was getting disinterest in the momentum plays that were only lasting a week. Looks like I pretty much nailed the medium term bottom on the Vix at 35.
I guess it’s fitting to bring this back. This one is for the paper-chasing bulls. Wipeout!
that sea doo dodge was quick thinking…
loved the sailboat wreck….
I covered 10 minutes ago
thanks
how about them iETFs. anythoughts on these, i thought these awaken when VIX spikes?
I think the I etf’s need the high vix just to track properly.
Good stuff. I was getting bored also. But seeing my shorts get really profitable, really quickly, makes things exciting again. I’m covering some now.
For the sake of conjecture, I’ll theorize that we bounce soon, maybe up to 8500 or so into the coronation, then we nosedive to below 7500 …. maybe 6800, but no lower than 6500. Then we start the big rally.
Of course, I am not attached to this outlook in any way.
You may be right, it may be time to cover. OTH, it seems rather rigid to create hard and fast rules with the VIX as they don’t take other factors into consideration.
In a ranging market then yes short at 40 cover at 50. The XLF broke down out of its range a couple of days ago and today the SPY followed.
Yeah, we might get a late day rally, the breakdown may fail, but we are in a bear market and when the range breaks probabilities are reasonably high that the range break can lead to something more. At a minimum, it seems (again, assuming we don’t get a late day goal line stand) the SPY will now have to test $82.
Love the video. Many favorite moments in there. Those guys were messing with some big piles of water.