UVXY can go lower than people think in the short term heading into January. The problem is with the VIX Futures term structure. The January futures are in the 17's. VIX is 12. So UVXY is at a major disadvantage until January when the curve flattens.
That's the problem the futures are getting more expensive into January. In October the futures were low. 14. So there was a window September and October for UVXY, and it had a good run, but for now that window has closed.
This is a beautiful thing for a volatility trader! We have volatility coming down prior to the Election. The most significant event for volatility in recent history.
SC - I feel like bears are capitulating en masse right now...In your previous post you said we are in the VIX box range of 12-24...seems like we are basing at 12 for a move to 24 soon. Perhaps by your original Nov 19 turn date...hmm...with a santa rally to follow back up...
SC, maybe a better strategy would be to short the indexes since they are very overbought with etfs then go long at the bottom. I use 2x etfs, works very well! https://stockcharts.com/h-sc/ui?s=$INDU
At this point I would wait to short until Thanksgiving November 28. We have talked about it for a while, and the USMCA is coming, and that is a positive.
"Mexico's top North American negotiator, Jesús Seade, is upbeat that the White House and lawmakers can reach an agreement on the U.S.-Mexico-Canada (USMCA) agreement before Thanksgiving.
Seade is basing his optimism on conversations held with House Speaker Nancy Pelosi and U.S. Trade Representative Robert Lighthizer last week. Seade believes a vote on USMCA will come up in the House before the holiday."
It looks to me that SVXY has topped for now. My trusty BPSPX indicator is beginning to roll over, if that is confirmed in the next few days then I think we will see a switch to SPXU and UVXY. The market is holding up remarkably well this morning considering rumblings of the partial China deal being delayed (again).
SPX is up 30 points this week but SVXY hasn't budged. We could very easily see a repeat of January 2018 when stocks continued to rise to the end of the month, but VIX and VXX/UVXY also rose. SPX was up 6% in January 2018 and VIX went from 10 to 15, before hitting 50 on Feb 6.
SC - We have record short VIX speculators again...shouldn't be going long SVXY up here...pennies in front a steamroller imo...VIX basing at the 12 level at bottom of the box like you said in previous post with large pos RSI div on multiple time frames...
Rob, it's a timing issue. Yes, I agree the VIX is low, but the timing is not ready for volatility. I plan to enter UVXY at Thanksgiving. There will be some volatility first half December with next round of Tarrifs due December 15th.
When we look at the SVXY it has catching up to do compared to SPX. This is because SVXY hasn't seen a higher high since September 2018. We will see that higher high now.
No, no. SPX is not appealing. SPX is near the high end of the range, upside is limited. Those looking for a blowoff top are going to be very disappointed when all it does is slowly grind up a little.
This is about volatility. Volatility is low and is going to get extremely low.
There is plenty of upside for SVXY and it will perform well in this low volatility environment. To see SVXY overbought on the weekly we can expect much higher.
SVXY is cheap because it's catching up to the run that SPX has already made over the last year. The structure of the VIX futures is set up perfectly for SVXY.
Look at SVXY today. SPX was down, VIX was up and SVXY was up again today anyway.
What are you gonna do sell UV XY at the bottom and By SVXY at the top?
ReplyDeleteExpect some better volatility in December.
DeleteUVXY can go lower than people think in the short term heading into January. The problem is with the VIX Futures term structure. The January futures are in the 17's. VIX is 12. So UVXY is at a major disadvantage until January when the curve flattens.
SVXY has the advantage until January.
I get it however we should drop hard hear then rip 2 upside when do you plan to sell and ag what price
DeleteWeren't the futures always like that since you bought it at 28
DeleteThat's the problem the futures are getting more expensive into January. In October the futures were low. 14. So there was a window September and October for UVXY, and it had a good run, but for now that window has closed.
DeleteThis is a beautiful thing for a volatility trader! We have volatility coming down prior to the Election. The most significant event for volatility in recent history.
ReplyDeletevixcentral.com/
ReplyDeleteSC: I take it that your 3015 forecast for this week is now off the table?
ReplyDeleteIt still looks like SPX to come down. Let's see.
DeleteSC - I feel like bears are capitulating en masse right now...In your previous post you said we are in the VIX box range of 12-24...seems like we are basing at 12 for a move to 24 soon. Perhaps by your original Nov 19 turn date...hmm...with a santa rally to follow back up...
ReplyDeleteVIX is getting closer to a low. I'm expecting VIX low in two weeks followed by VIX up 10 weeks to a 20 high by February.
DeleteThe chart says a one day wonder for UVXY can occur with SVXY dropping back towards the blue line before running higher.
ReplyDeleteCould Trump's tax returns be about to be released???
SC, maybe a better strategy would be to short the indexes since they are very overbought with etfs then go long at the bottom. I use 2x etfs, works very well!
ReplyDeletehttps://stockcharts.com/h-sc/ui?s=$INDU
probally right which ones you using
DeleteAt this point I would wait to short until Thanksgiving November 28. We have talked about it for a while, and the USMCA is coming, and that is a positive.
ReplyDelete"Mexico's top North American negotiator, Jesús Seade, is upbeat that the White House and lawmakers can reach an agreement on the U.S.-Mexico-Canada (USMCA) agreement before Thanksgiving.
Seade is basing his optimism on conversations held with House Speaker Nancy Pelosi and U.S. Trade Representative Robert Lighthizer last week. Seade believes a vote on USMCA will come up in the House before the holiday."
It looks to me that SVXY has topped for now. My trusty BPSPX indicator is beginning to roll over, if that is confirmed in the next few days then I think we will see a switch to SPXU and UVXY. The market is holding up remarkably well this morning considering rumblings of the partial China deal being delayed (again).
ReplyDeleteSPX is up 30 points this week but SVXY hasn't budged. We could very easily see a repeat of January 2018 when stocks continued to rise to the end of the month, but VIX and VXX/UVXY also rose. SPX was up 6% in January 2018 and VIX went from 10 to 15, before hitting 50 on Feb 6.
ReplyDeletehttps://www.youtube.com/watch?v=4XB23SOVC9Y&feature=em-uploademail
ReplyDeleteSold UVXY $18.25, TVIX $8.50.
ReplyDeleteBought SVXY $59.10.
ReplyDeleteSVXY likely heading for $61 soon. It has catching up to do with SPX, and it can get there quickly.
ReplyDeletetrading this for 2 points you should just short uvxy you will make alot more
Deletefinding it hard in my opinion to short volatility here at the bottom not making sense
DeleteUVXY has a long way to hit bottom. The reason to exit UVXY is to enter at a lower price with many more shares.
DeleteSC - We have record short VIX speculators again...shouldn't be going long SVXY up here...pennies in front a steamroller imo...VIX basing at the 12 level at bottom of the box like you said in previous post with large pos RSI div on multiple time frames...
DeleteRob, it's a timing issue. Yes, I agree the VIX is low, but the timing is not ready for volatility. I plan to enter UVXY at Thanksgiving. There will be some volatility first half December with next round of Tarrifs due December 15th.
DeleteTariff talk will fade now and the positive USMCA will become the focus for this month. The month looks positive.
ReplyDeletelol
ReplyDeleteWhen we look at the SVXY it has catching up to do compared to SPX. This is because SVXY hasn't seen a higher high since September 2018. We will see that higher high now.
ReplyDeleteThanks SC. When do you see UVXY hitting 11 now?
DeleteUVXY $15 late this month, and $11 on New Year's Eve.
Deletesc you are expecting uvxy to drop to 10 bucks in january and 16 in november correct
DeleteThat would be a great set-up to short jan
ReplyDeleteAbsolutely, I am looking forward to it. January will be quite spectacular...
DeleteVIX putting in death cross today on daily. It's whipsawing on the daily, but the bigger picture, the weekly, still looks good.
ReplyDeleteWhy is SVXY rising today? Because the market knows there is nothing else to talk about tariffs until December.
SVXY leading to the upside today.
You could be wrong with this though you were wrong before
DeleteYou never you say you don't believe in miracles it would be a miracle for this to go up medal Remember what you said the vix's at 12:12
DeleteI do not believe in miracles, then or now. Don't get me wrong I think it is irrational. And when this happens it is very profitable.
DeleteSVXY first lower to 57-57.5 then higher to 61.
ReplyDeleteI'm seeing this... bounce back to 21 VXX before lower https://imgur.com/a/xzD6ON5
ReplyDeleteI agree
Deletehttps://www.youtube.com/watch?v=WJyi9jcr58E&feature=em-uploademail
ReplyDeleteSVXY melt up! This morning's dip last all of 3 minutes...
ReplyDeleteTrump speaks tomorrow at the Economic Club of New York, and going into an election year, he is going to knock the ball out of the park.
Look at RSI, are sure this is melt up and not a high?
DeleteHuge risk for pennies. There is high probability the move from Dec.2018 is over.
What does it mean sc. Spx. 4000.
ReplyDeleteNo, no. SPX is not appealing. SPX is near the high end of the range, upside is limited. Those looking for a blowoff top are going to be very disappointed when all it does is slowly grind up a little.
DeleteThis is about volatility. Volatility is low and is going to get extremely low.
There is plenty of upside for SVXY and it will perform well in this low volatility environment. To see SVXY overbought on the weekly we can expect much higher.
ReplyDeleteSVXY is cheap because it's catching up to the run that SPX has already made over the last year. The structure of the VIX futures is set up perfectly for SVXY.
Look at SVXY today. SPX was down, VIX was up and SVXY was up again today anyway.
when you say plenty upside what is the target?75 and what is your time frame nov dec january
Deletesc also when you say vix is low how low is it going?10 11
DeleteSVXY $80 or more April.
Deletemrvl i bought at 15 17 and 20 bucks its 28 right now i think it could go to 50 just my opinion this 5 g looks xplosive
DeleteNice looking chart Louis!!
DeleteVIX is close to a low and still within the rectangle. There is good support in the 11's.
DeleteNext year VIX 7 April.
Deleteit has never seen 7 ever
Deleteok how ever your holding svxy till april there has to be some kinda pop in the short term
DeleteSo no more 60 vix early next year?
DeleteDecember and January look quite choppy and will be good for trading. Yes, there will be pullbacks and I look forward to taking advantage.
DeleteJoe, later next year, it is on track - the Election. Best opportunity in volatility that I've ever seen.
DeleteFirst steps first.
Sweet, thanks SC, hope all the waiting pays off.
Deletehttps://www.screencast.com/t/lCxIi81BWhYI
ReplyDeletehttps://www.youtube.com/watch?v=GBjhaT27jXk&feature=em-uploademail
ReplyDeleteI have a plan for Bitcoin. Just waiting for the price to drift lower.
ReplyDeleteAnd here comes Trump up to bat...
ReplyDeleteSo no pull back at all. Svxy to 80. Confused
ReplyDeleteYes there will definitely be pullbacks in December and January.
DeleteCan u pl post new updated chart.
ReplyDeleteNext year is 4 year cycle low the markets are topping like SVXY, but 80 is a nice dream:)
ReplyDeleteKrasi what's your short term prognosis on uvxy
Deletehttps://www.youtube.com/watch?v=vwXkiU-HtP0&feature=em-uploademail
ReplyDeleteAfter being down 6 weeks consecutively VIX will probably close slightly up this week.
ReplyDeleteThe market is holding solid because a positive event is ahead.
We're coming up to the dominant event for the month which is the USMCA ratification around Thanksgiving.
This is likely to be the next high for SPX with VIX down into the 11's.
SVXY looks like it'll close up again this week! Up 7 weeks consecutively!!
ReplyDeleteNext week the strongest.
New charts posted!
ReplyDelete