Updates for Friday 8/7/20
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Updates 1:21 PM EST - Friday 8/7/20
Where you choose to place your stops, or manually exit your positions will depend on your trading style. We've been sharing with you the major $VIX $VXN signals as well as the minor ones to help you make this decision.
$VXN (Nasdaq volatility) is still grinding upward, and it may go as high as 31.25. This is no longer a minor signal, but it is a major signal that is complex and will take time to build.
The best take away for now is do not enter $NDX QQQ TQQQ yet. But don't make bearish bets against them ahead of the weekend either. We will discuss the $NDX $VXN situation in more details in the weekend analysis.
$VIX is forming ....
Updates 12:19 PM EST - Friday 8/7/20
Per our alert at 10:46 AM, $VXN (Nasdaq volatility) is now grinding upward gradually as $NDX drops sharply.
Updates 10:46 AM EST - Friday 8/7/20
$VXN (Nasdaq volatility) is grinding sideway in an attempt to form a support base, from which $VXN will anchor and then rise. $VXN may rise as high as 30.5 while it does this.
$VXN may not succeed in forming this base, but it is best to wait for $VXN to finish this base, show signs of breaking out or breaking down, before entering $NDX QQQ TQQQ.
In addition to rising $VXN, $NDX is suffering from FAANG++ stocks taking a break (FB AAPL AMZN NFLX GOOG MSFT TSLA BABA). The only one that rose this morning is FB.
Updates 9:12 AM EST - Friday 8/7/20
Overall conditions continue to be bullish for $SPX $NDX IWM. $VIX is not going to create major headwinds for stocks.
However to start the day, $VIX will most likely rise a small amount. It may reach as high as 25.
This will result in $SPX $NDX IWM dropping in a minor pullback to support. The highs of August 5 is first minor level of support.
If $SPX $NDX IWM find enough buyers here, and with $VIX running into resistance at 25, $SPX $NDX IWM will resume the rise.
Updates 12:40 AM EST - Friday 8/7/20
Short Term: $VIX $VXN
Short Term: $SPX $NDX IWM
Short Term Support & Resistance Zones
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Short-term Trade Setup
Right now, the charts of $VIX $VXN are not showing the formations that typically precede an eruption in volatility.
Therefore, despite some minor bearish headwinds here and there, the last major signal from $VIX was on 7/30 and it was bullish for $SPX $NDX IWM. This bullish signal is still intact as of end of Thursday, and is confirmed by $VXN.
Until we observe a major signal from $VIX that is bearish, and confirmed by $VXN, we treat all pullbacks in $SPX $NDX IWM as minor, and as opportunities to add to long positions.
Tonight's sell-off in futures market will create some pullbacks at the start of Friday for $SPX $NDX IWM. We will confirm with $VIX signal premarket.
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