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Thursday, October 24, 2019

VIX - Rectangle

The VIX has formed a rectangular pattern, and is approaching the main trendline and rectangle support.

VIX is bound within the rectangle in the short term.  Once the pattern matures the moves will become extremely violent.

Daily

111 comments:

  1. https://www.youtube.com/watch?v=_3gctX5TZuc&feature=em-uploademail

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  2. Replies
    1. So that's when you expect to move in UV X

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    2. SC - so you are not expecting a breakout of the VIX rectangle until December?

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    3. VIX is approaching the low end of it's range. Expect bounce off the orange support. It's bound inside this rectangle until year end.

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  3. But there is a path down to 200dma cement floor S&P 2870s:

    1) Fed doesn't cut
    2) AAPL catastrophic miss, earnings

    Both would have to happen.

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    1. Why? Because you bought uvxy at $28?

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    2. no i bought 28 26 24 21 and 19.75 and tvix position the last position i bought was more than my whole position
      i am thinking a huge drop of 10 percent or more by nov 15

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  4. sc are you waiting till wednesday to buy more at the bradley top

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    1. As slow as this market is moving this can take weeks.

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  5. Btc have changed its plans?

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  6. What we're likely to see is VIX test the orange line. That is the July low.

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  7. Enjoy the calm because after this rectangle ends you won't believe the rollercoaster with your own eyes....

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  8. Massive Put activity on November VIX

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    1. Lol you make it sound like it's going to 10 tomorrow

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    2. No. But it's worth keeping an eye on.

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  9. I don't get why you would trade against the trend. Stocks bottomed early October after the Fed announced expanding their balance sheet again. No signal or chart is perfect but over the years I have found BPSPX to be the best short to medium term indicator. Most recently it bottomed Oct 9/10 and has been trending up since. Pat few weeks not a good time to be in UVXY or SPXU, but we may be near another turn.

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  10. Looks like now targets gone to 3150. 3200 3500. Fed introducing 100 billion every day No correction people looking. Msft jumped 4bpoints Will take market to new high

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  11. sc i think your charts should be focused on the short side of uvxy aswell because uvxy came down 10 points your thoughts?

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    1. Yes, but I don't short UVXY at all. Either long SVXY or Put options on VXX.

      The VXX $21.50 October 25 Puts were excellent. Up 500%.

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  12. The volatility ETFs are oversold here and likely to bounce for a few days. TVIX $9 bounce close to $10.

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  13. Bought TVIX $9.15. Target close to $10.

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    1. You plan on dumping everything at $10

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    2. Yes, I'll be out of everything. I think we are going to have to be more nimble for now.

      The curve on the VIX futures is against us until January. Nimble until then when it flattens.

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    3. for the small guy on this blog dont you think you should have been saying this long ago?

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    4. I think we go to 3400 then down 30 percent

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    5. Wait, then why did you load the boat on uvxy at 28?

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  14. What does it mean Will be out uvxy. U think market goes up till jan

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    1. It means the decay for volatility ETFs will be high until January.

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  15. I am not understanding the logic you wanna sell When the VIX is low and you wanna buy when the VIX is high frankly I don't understand that logic

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  16. only one way to be is short this piece of crap!!! on pops

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  17. SC, your previous post clearly showed spx going to 2750 by December. Very hard to follow if view changes completely every 2 weeks.

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    1. I am probably early, but this is a major top forming for SPX.

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  18. The money on UVXY is made on the big moves, and the money is made by holding. As you all know I'm more focused on entries for the bigger plays. UVXY tripled twice last year. Those are the moves to catch.

    To get a good entry you might have to exit and reenter to get it right. You don't have to be perfect but you want to be close.

    The problem right now for the volatility ETFs is that the decay is simply too high. VIX is getting close to a low, but not ready for a major move quite yet.

    So it's all about capital preservation.

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  19. VIX has been strengthening for years. It's getting into the best configuration. Just wait.

    Volatility has almost everything on its side.

    Patience is the key. The timing will come.

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    1. SC - You have said for quite a while SPX may try to reach SPX 3050-3070....we are just in the topping process...thanks for your great calls...please keep it up!

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    2. Yes Rob, SPX finally made it after months of attempts.

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  20. let me get this straight you want to sell tvix at 10 are you selling uvxy 2?

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  21. I didn't mean the number 2 I Meant are you selling UV XY as well

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  22. Yes, the hedging strategy worked well but I'm not going to let positions go against month after month.

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  23. listen guys, you have made huge profits following SC in an extremely risky gamble. Nobody is right all the time yet to blindly went in big. SC has made an error & is trying to protect his capital. My advise is to thank him & look for an out as well. This instrument is pure gamble. Should not play with more than you are willing to lose

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    1. yes thats true however you need to protect the novices on the blog its only right nobodys blaming sc we know its a gamble

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  24. Sc after 10 tvix down to what 6 uvxy down to 14.90 bottom of channel

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    1. UVXY may see $11 in first half January followed by $21 also in January. It shows clearly on the chart. I'll post the chart.

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    2. that means uvxy will split and so will tvix

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    3. Not necessarily because they typically split if they are low for a period of time.

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  25. "Brexit: European leaders agree extension to 31 January"

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  26. I agree not to fight the trend, but a person shouldn't fall in love with it either.

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  27. Replies
    1. SPX may get overbought on the daily, something it has been too weak to do all year.

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  28. FYI, there are 2 Scott’s on this site.
    I think that SC provides an incredible site and advice.

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    1. yup sorry, I don't usually say too much though

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  29. wow UVXY $11 that's another 50% drop from here, will follow you and dump at $10, live to fight another day

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    Replies
    1. We do have to pick our battles...

      The best opportunities are coming.

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  30. Hi SC,

    Both of my minimum targets for SPX500 and VIX have been met. I have always had November 21st as the cycle date, but was not sure about the direction. There is a change in January as well.
    After consolidation, next target based on the congestion is 3100.
    Best of luck to everyone.


    Tom27October 5, 2019 at 6:16 PM
    Hi SC, thank you for update. I believe spx will whipsaw for a bit and eventually go for your target of 3050-3080. Cannot pin point yet as I dont have a break out point yet. All the best.

    Tom27October 5, 2019 at 6:20 PM
    Forgot to mention, VIX target is 12.5

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    1. Thank you, very nicely done!

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    2. Thank you SC. I absolutely agree with you. These leveraged etfs can be devastating to once account whether up or down. I cannot get good targets with them so use solely $VIX. VIX will have its day. All the best

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  31. I DONT SEE A DROP LIKE THAT I THINK IN MY OPINION THE VIX WILL SPIKE!!!!!

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    1. VIX is quite close to a low both in time and price. Two weeks.

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  32. TRANSPORTS GETTING SMASHED I EXPECT OTHER INDICES WILL FOLLOW LOOKING FOR 3000 IN SPX

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  33. My preferred method with vix vehicles is to short.
    Most of these are designed to head toward
    zero. https://www.screencast.com/t/tFdLOFmR4OP

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  34. On the topic of shorting VIX ETFs.
    There's a time that shorting is a good strategy, and there is a time to avoid it. It can be extremely dangerous at times.

    People need to understand the risk profile. When you short UVXY (or anything else) you expose yourself to unlimited losses mathematically.

    For every dollar you put in, you can lose 10.

    A trader shorting VIX ETFs will eventually be wiped out completely. They won't be able to withstand the margin calls, and will have no choice but to close the trade at a gigantic loss.

    MF Global went bankrupt buying European bonds. They were right. The European crisis was ending, and the bonds would bounce back eventually, but MF was overexposed and could not meet the margin calls.

    Currently we have low VIX at 12. VIX has already tested the 1987 trendline.

    We are heading into the US elections with Donald Trump being investigated. Trump has not only warned repeatedly of stock market crashes, but even goes further to mention Civil War in the event he is removed from office either by impeachment, or a loss at the election.

    This is the superbowl for volatility, a dream setup for VIX. We have a 60 target for VIX on a panic, and believe me you do not want to be stricken by the unbearable pain of being short VIX ETFs when that panic occurs.

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    1. I definitely a have made a crazy amount of money shorting this pic however I would not sure that right now you gotta be insane to short this Right now in my opinion

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    2. There's a time and place for the VIX short trade and there are times to avoid it.

      It becomes dangerous when people get into the habit of doing it without considering the consequences. Even worse some keep this trade on constantly, and inevitably the unlimited losses will become the reality.

      I also plan to capitalize on drops in VIX ETFs but instead of shorting, I plan to use VXX Puts. The Puts are surprisingly cheap, the losses are limited, and the gains are unlimited. The risk profile is very favourable. You do have to be right on the time and selection of the Puts obviously.

      Anyway, when the time comes for that I will explain the trade.

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  35. I'm a glutton for punishment Sitting on the bid of TVIX

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    1. TVIX came close this morning at $9.85. Still expect that to be tested again during next 3 to 5 days.

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  36. Some have asked what about the Fed? Look at the Dow. The Fed has cut three times since July and the Dow is down 230 points since July. The Fed is supportive but only to the extent that the market won't fall as much.

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  37. https://www.youtube.com/watch?v=Ehn1q7UTfu0

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  38. also: oct 10, 2002 bottom- oct 11, 2007 top= 1827 calender days; feb 11, 2016 bottom + 1827 calender days= feb 11, 2021.

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  39. That did not went as expected.
    SC: thanks for all your work. Could this be of any help regarding your model?
    https://www.mcoscillator.com/learning_center/weekly_chart/volumetility/

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    Replies
    1. Thank you for this, appreciate it! Tom McClellan has a keen eye for interesting relationships.

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  40. Tvix uvxy 2 pigs Is market is holding 3062 like Conan is on the bid

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  41. https://www.youtube.com/watch?v=lErUvafjYcs&feature=em-uploademail

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  42. Replies
    1. UVXY still coming down to the $11 target by the New Year. It can pop anytime but UVXY declining into November month end.

      Definitely going to see volatility first two weeks of December.

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  43. January still looks to be an important time for VIX.

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  44. i aint holding this down till 11 i will short this piece of shit down

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  45. your gonna hold this till 11 fom 28 that makes no sense at all

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    1. No plans to hold it until January, but it will be choppy markets and good to trade in December.

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  46. im not following your logic are you waiting for a pop to 10 to get out or are you holding this down till 11and tvix to 4 whats your prognosis?

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    1. It already came close to $10 hitting $9.85. It should still pop this week.

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  47. SC, last Friday you wrote here that SPX would be 3015 "next week" (meaning this week). Shouldn't UVXY get a pop?!

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    1. we should see that level by wednesday thursday hopefully

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    2. The markets seem FAR too complacent.

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  48. we will be lucky to get to 9 on tvix and 20 on uvxy

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  49. VIX already signaling. Higher low from Thursday. In disagreement with SPX.

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  50. WHAT A PIECE OF SHIT SHOULD ONLY SHORT

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    1. your right i had the short but my friends talked me out of it for sure i will be short on the next pop

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  51. What could you say about crypto XRPUSD pair on tradingview? Any burst incoming? As some PA looks similar

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  52. this market should drop hereinto friday hard

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  53. Paul Tudor Jones calling for most volatile election in his lifetime.

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  54. after drop we are gonna have a ferocius rally over 3100

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