Updates 2:21 PM ET - Friday 5/26/23 Our SVIX trades so far We manually scaled into SVIX after PCE report per our trade plan from last night. Based on VIX patterns, VIX is still likely to retest 15.6 - 16.6 before launching into its 2nd "anxiety" spike. This means that SVIX is likely to retest near its May 19 high. We've tightened stop on 1/2 of our position to get out at breakeven, but removed stop on the other half to cope with big swings if they come. We intend to hold onto at least 1/2 position over the weekend.  Updates 1:30 AM ET - Friday 5/26/23 Explanation of Indicators Background info on $VIX, $VVIX, ES, NQ RTY  Key S/R levels RTY support levels have been updated. All other levels remain the same.  Projections Here are our updated projections.
An "anxiety" spike typically results in a moderate drop for ES NQ RTY. Right now, we don't see any VIX setup for a "real fear" spike, and certainly not a "panic" spike. Not yet anyway. However, after VIX reaches back into the support zone 15.6 - 16.4, it may form a 2nd "anxiety" spike. This 2nd spike may happen during the week of 6/12 with CPI, FOMC and June OpEx. This spike may take VIX up to 22 - 23 before it drops back down again. We don't have enough data at this point to project what will happen after the 2nd "anxiety" spike. But both bulls and bears should keep in mind that these "anxiety" spikes are short-lived and typically result in choppy price actions for ES NQ RTY. Our Personal Trade Plan
Click here for Signal Trades spreadsheet. Disclaimer The information presented here is our own personal opinion. Consider it as food for thought. We are not offering financial advice. We are not promoting any financial products. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. You are proceeding at your own risk if you follow our trades.
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Updates 6:10 PM ET - Friday 5/5/23 Sold SVIX because... After hours analysis shows VIX is likely to rise sharply on Mon. We've decided to lock in our SVIX profit and re-enter Monday if SVIX dips substantially again. Sold full position SVIX at 18.5 after hours. (This alert was shared live on Twitter DM.)  Updates 12:21 PM ET - Friday 5/5/23 Watch out for VIX bouncing VIX dropped right after the job report. VIX is now below all the EMA lines. It may start to bounce after such a sharp drop. This is why we raised SVIX stop.  Entered SVIX per trading plan VIX didn't spike up after the job report. Instead it just paused and then started dropping. We scaled into SVIX at the drop. (This alert was shared live on Twitter DM.)  Updates 1:30 AM ET - Friday 5/5/23 Explanation of Indicators Background info on $VIX, $VVIX, ES, NQ RTY  Key S/R levels The table below has been fully updated.  VIX rose higher on Thursday on fear of more regional banks collapsing. VIX got close to its 200-day EMA which is currently at 22. Our indicators are still leaning mildly bullish. So we are projecting that VIX will spike up to test 22 after the job report. Then VIX will likely begin its multi-day descend. VIX may drop as low as 16.6 before it builds a W bottom to surge up again. What will ES NQ RTY do while VIX drops? They are likely to rise up to retest R1. NQ may find enough bullish momentum to pierce R1, but ES and RTY are likely to run into major resistance at R1. We may see VIX drop steadily towards 16.6 while ES NQ RTY go sideway around R1 levels. Our Personal Trade Plan We want to capture VIX potential drop from 22 down to 16.6 zone. Click here for our buy orders. Disclaimer The information presented here is our own personal opinion. Consider it as food for thought. We are not offering financial advice. We are not promoting any financial products. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. You are proceeding at your own risk if you follow our trades.
Updates 7:15 PM ET - Sunday Upcoming key events The key event this week is VIX OpEx on Wednesday and OpEx on Friday. We will discuss more about this further below.  Earnings this week Chart courtesy of Earnings Whispers. Earnings season gets going in earnest this week with important reports from Tesla, Schwab, Bank of America, Netflix, Johnson & Johnson and Goldman Sachs. Traders will also be closely monitoring smaller regional banks for the viability of their earnings. (Read more on macro conditions here.)   Key S/R levels The table has not changed.  Our indicators are still mostly bullish (green). However, much of this has to do with $VIX dropping as VIX OpEx approaches (Wednesday 4/19). By Thursday, we may see VIX futures start to rise, and spot VIX ($VIX) may rise at the same time. However $VIX may not seriously rise until Monday April 24, after equity OpEx. What this means is that bulls should consider taking profits or tightening stops by Wednesday - Thursday this week. After that bulls and bears should both be patient because the period between VIX OpEx and equity OpEx can be unpredictable. Wait until VIX, market breadth and ES NQ RTY price patterns convey the same message (bullish vs. bearish) before scaling into the next multi-day position. Updated NQ projection:
ES and RTY are likely to follow the same path as NQ. Is volatility going to erupt next week? No. Even though $VIX is likely to rise after April 19, it is unlikely to exceed the zone 22-23. $VIX 20-day EMA blue line has not formed another W bottom yet (see red arrows). These W bottoms have to form repeatedly in the same zone for $VIX to take off.  Our Personal Trade Plan On Friday, $VIX continues to drop as expected, but ES NQ RTY were not tracking $VIX moves as closely. Instead they dipped more than expected in the morning. This happens sometimes. The market acts more bearish than as reflected by $VIX. Our attempts to scale into bull position TNA resulted in a minor loss. But we re-entered one more time with a half-size TNA position to hold over the weekend. We plan to add the remaining half on Monday, and hold until Wednesday. See our buy orders in spreadsheet. Disclaimer The information presented here is our own personal opinion. Consider it as food for thought. We are not offering financial advice. We are not promoting any financial products. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. You are proceeding at your own risk if you follow our trades.
Updates 11:59 AM ET - Tuesday 4/4/23 Quick $VIX spike coming $VIX has formed an intraday W bottom, as shown on its 30-minute chart below. $VIX is likely to spike from here to the zone 21 - 21.5 before resuming the down trend. It may not spike until tomorrow. As $VIX spikes up, ES NQ RTY are likely to retest S1. But they are unlikely to drop lower. The bullish momentum is still strong. This is just a short term dip. Therefore, this is not a low-risk setup for bears to enter multi-day bear positions. Rather it's a signal for bulls to lock in short term profit, and re-enter at the next dip when ES NQ RTY retest S1. This should coincide with our TQQQ entry as shown in spreadsheet.  Updates 1:40 AM ET - Tuesday 4/4/23 Key S/R levels The table below has been partially updated.   Our indicators are still mostly bullish (green), but there are hints of a short term top forming for ES NQ RTY. We may see $VIX forms a quick spike to retest the zone 21 - 21.5. As $VIX spikes up, ES NQ RTY are likely to retest S1. But they are unlikely to drop lower. The bullish momentum is still strong. This is just a short term dip. Our Personal Trade Plan Our plan is to buy the dip. See updated trade setups and buy orders in spreadsheet. Disclaimer The information presented here is our own personal opinion. Consider it as food for thought. We are not offering financial advice. We are not promoting any financial products. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. You are proceeding at your own risk if you follow our trades.
Updates 8:30 PM ET- Sunday Upcoming key events Though this week has a number of economic reports, the true market moving event will be the job report next Fri Mar 10.  Earnings this week Chart courtesy of Earnings Whispers.  What, me worry? Bears should take note of the muted reactions to negative economic news lately. Feb 14 CPI was higher than expected, as was Feb 24 PCE. FOMC minutes on Feb 22 were highly hawkish. However, none of these events caused a major sell-off or a nosedive to the bottom. One could argue that the price actions of ES, NQ, and RTY since Feb 2 have been a way for the market to process the overly enthusiastic buying since the start of the year. As we wrote on Friday, traders don't appear to be panicking. There is no rush to buy puts, no panic selling, and no priming for Black Monday. It seems that high inflation and high interest rates for longer periods of time are becoming the norm for the market. This combination is getting baked into price actions, and it will likely take much more dramatic events to cause panic in the market. Key S/R levels All support levels have been updated to reflect the current sell-off.     Projections
As the charts above show, $VIX and $VVIX will need time to form the bearish W bottoms in order to really surge. Until $VIX $VVIX form such patterns, we are going to lean bullish with ES NQ RTY. Furthermore, if $VIX $VVIX fail to form the bearish W bottoms, ES NQ RTY will take off even more. Our personal trade plan It seems to us that the best strategy is to wait for ES NQ RTY to form a bullish setups on their intraday day charts (30-min) to scale into multiple bull positions. We are monitoring the 20 EMA on these charts and waiting for W bottom patterns to form. We may enter a quick bear position if we observe a highly bearish intraday setup. As of right now, there is no such pattern. We understand the desire to trade frequently and capture every swing in the market. However, given current market conditions, unless we are day trading, we are likely to get stopped out from short-term, choppy conditions. Therefore, we are choosing to wait for intraday setups to form before taking any positions in either direction. Click here for Signal Trades spreadsheet. Questions? For new members who may not be familiar with the information we post in this blog, please check the glossary for more information. You can also email us with questions directly. Disclaimer The information presented here is our own personal opinion. Consider it as food for thought. We are not offering financial advice. We are not promoting any financial products. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. You are proceeding at your own risk if you follow our trades.
Updates 4 PM ET- Thursday 1/12/23 Scaled into TNA post CPI report Based on the projections we wrote about pre-market below, we scaled into our bullish position TNA after the CPI report this morning.  Members were notified of these entries.  Updates pre-market Thursday 1/12/23 CPI report is released at 8:30 AM ET Thursday. Key S/R levels
 As projected yesterday, ES NQ RTY 15-minute charts all show rising 200 EMA green lines. This shows that the bullishness is continuing. But RSI shows that RTY (as well as ES NQ) are all highly overbought. So to better optimize our entries, we want to wait for price to get down closer to the 200 EMA green line. We also want to wait for RSI to drop down to oversold levels, as shown via all the green arrows below (15-minute chart). We think RSI will swing to oversold and RTY will drop down to closer to its 200 EMA green line when RTY revisits the zone of around S1 (1815 - 1830). The same is true for ES and NQ.  New bull market starting? You read that right. The weekly chart for S&P 500 Percent of Stocks Above 200-day MA below is telling us that a bull market may actually be building up under the hood. This is because its 20-week EMA blue line is crossing above its 50-week EMA red line. This crossing is not easily done on a weekly chart after a massive steep drop. So for the pattern to form, market breadth has to have been rising strongly. In the past this pattern has been quite reliable in predicting a new bull market (see the green arrows on chart below). This does not mean that we won't see pullbacks. But what this means is that 3700 may be a very strong support level, as well as a potential bottom for ES and $SPX. This signal could be totally wrong here. After all, macro fundamentals are still very bleak. But it's worth contemplating this possibility, and pay attention to these EMA lines.  Our Personal Trade Plan We continue to concentrate on scaling into TNA. We think RTY is likely to retest 1815-1830 range. This means TNA is likely to retest the 33.7 - 34.7 range. In the Signal Trades spreadsheet, we have shown our buy orders to scale into TNA in the above price range. Keep in mind that it's very hard to nail the exact numbers. These ranges are meant to give you an idea of where prices are likely to dip to. But we will override everything and manually enter TNA based on what the charts how immediately post CPI. So look for our alerts. Questions? For new members who may not be familiar with the information we post in this blog, please check the glossary for more information. You can also email us with questions directly. Disclaimer The information presented here is our own personal opinion. Consider it as food for thought. We are not offering financial advice. We are not promoting any financial products. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. You are proceeding at your own risk if you follow our trades.
Updates 1:45 AM ET - Wednesday 1/11/23 CPI Unlike previous occasions, Powell's speech on Tuesday resulted in ES NQ RTY rising. Here are some projections for CPI on Thursday from JP Morgan. As you can, they are projecting a higher probability of S&P rising from CPI data as opposed to dropping.  Additionally, the Fed is now floating via WSJ the possibility of 0.25% interest rate increase on Feb 1. Read more here. So conditions are primed for ES NQ RTY to continue rising. Key S/R levels All S/R levels have been pushed upward in the table below, as ES NQ RTY are showing more bullish strength.  Since January 4, we've been explaining that ES NQ RTY are setting up bullish patterns. After Powell's speech on Tuesday, this bullish pattern is becoming even clearer. Keep an eye on RTY 200 EMA green line on its 15-minute chart. As you can see it is starting to rise up steadily. We are aiming to scale into TNA as RTY retests around the 200 EMA zone. Note that $VIX $VVIX and all market breadth charts are currently showing setups that are bullish for stocks.  Our Personal Trade Plan In the Signal Trades spreadsheet, we have shown our buy orders to scale into TNA post CPI. Subscribe to get our latest analysis, daily trade plans and live intraday trades. Current trade record here. Questions? For new members who may not be familiar with the information we post in this blog, please check the glossary for more information. You can also email us with questions directly. Disclaimer The information presented here is our own personal opinion. Consider it as food for thought. We are not offering financial advice. We are not promoting any financial products. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. You are proceeding at your own risk if you follow our trades.
Updates 4 PM ET - Friday 12/23/22 Today's exit from bear position (TZA)  Updates 1:33 PM ET - Friday 12/23/22 $VIX and market breadth suggest a rally may be in the making $VIX tried to rise this morning but did not succeed. It may be still building a base for rising, but so far it has very little momentum. We have to allow for the possibility that $VIX is building a base for possibly dropping a lot more. This would mean another bear market rally is in the making. Market breadth charts support this possibility. ES NQ RTY price actions also support this possibility. So we have tightened the stop on our TZA positions. We are not entering TNA or any bullish position yet. The next key reversal point will likely come after the job report on January 6. Have a wonderful holiday. Updates 1:00 AM ET - Friday 12/23/22 Key S/R levels The relief bounce was sharp but short. Below are the new key S/R levels.  Right now price actions, volatility and market breadth tell us that conditions are bearish. We need to continue monitoring the key charts for clues. Are the bearish conditions continuing, or are ES NQ RTY setting up for another bear market rally? In RTY 4-hour chart below, we discussed the bearish versus bullish EMA patterns that we are looking for. We are leaning bearish at the moment. Note that Personal Income & Spending report at 8:30 AM may move market direction given the thin holiday trading.  Market breadth: bearish; Volatility: bearish Market breadth charts have gone back to being quite bearish. $VIX chart is finally forming the W bottom pattern that we've been waiting for. To ensure that this W pattern continues to develop, we want to see $VIX 20-hour EMA blue line surges above its 200-hour EMA green line. This green line currently is close to 22.8 which is a crucial $VIX level. If the W pattern stays intact and $VIX 20-hour EMA blue line surges up, that's a very bearish setup for stocks. On the other hand, we may see $VIX 20-hour EMA blue line rises just a bit above its 200-hour EMA green line, then drops back below it. That's actually a highly bullish setup for stocks to reverse into a bear market rally.  Our Personal Trade Plan
Subscribe to get our latest analysis, daily trade plans and live intraday trades. Current trade record here. Disclaimer The information presented here is our own personal opinion. Consider it as food for thought. We are not offering financial advice. We are not promoting any financial products. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. You are proceeding at your own risk if you follow our trades. Disclaimer The information presented here is our own personal opinion. Consider it as food for thought. We are not offering financial advice. We are not promoting any financial products. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. You are proceeding at your own risk if you follow our trades.
Updates 4 PM ET - Tuesday 12/13/22 Today's bearish entry into TZA  Updates 3:06 PM ET - Tuesday 12/13/22 It was a bull trap as anticipated $VIX chart was very difficult to track today as it swung all over the place pre-market. But SVXY chart gave us a pretty good clue where volatility is heading. SVXY 30-min chart below shows SVXY forming double top pattern above its 200 EMA green line. This pattern is usually followed by multiple weeks of rising $VIX. So we entered TZA this morning, after a quick small test of TQQQ. TZA took off nicely as ES NQ RTY all dropped sharply. But don't expect them to keep dropping just yet. The odds are high that there will be some thrashing price actions while ES NQ RTY form a top. We are holding on to our TZA position and have not tightened stop just yet. We plan to add another TZA position after FOMC tomorrow if this bearish pattern plays out.  Updates 8:57 AM ET - Tuesday 12/13/22 Maybe bull trap Consumer prices rose less than expected. ES NQ RTY have shot up, but $VIX and UVXY charts are sending out warnings that this may be a bull trap. Our buy target right now is actually SQQQ. Monitoring to scale into when it forms a bit more of a base. Updates 12 AM ET - Tuesday 12/13/22 Key S/R levels The S/R levels have been revised in the table below.  Post CPI scenarios to consider 1. Very cool CPI: Highly bullish. ES NQ RTY will surge sharply right away, while $VIX will drop. ES NQ RTY may end up above R2, with ES possibly up near 4300 eventually. In this scenario, we'd enter TQQQ immediately. 2. Very hot CPI: Highly bearish. ES NQ RTY will drop sharply right away, while $VIX will surge. ES NQ RTY may end up as low as S3 eventually. In this scenario, we'd enter TZA immediately. 3. Barely budging CPI: Very tough scenario to discern in advance. We think that the following $VIX path may take place in this scenario. (See chart below.)
 Subscribe to get our latest analysis, daily trade plans and live intraday trades. Current trade record here. Disclaimer The information presented here is our own personal opinion. Consider it as food for thought. We are not offering financial advice. We are not promoting any financial products. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. You are proceeding at your own risk if you follow our trades.
Updates 1:53 PM ET - Tuesday 11/15/22 Stopped out of TNA runner position Per explanation at 10:01 AM below, we tightened the stop on our TNA runner position and got stopped out. We locked in close to 12% profit in 4 trading days (since last Thursday). We are in cash 100% right now and waiting for $VIX and market breadth to reveal the next major move. This next major move is unlikely to happen until this OpEx Friday or Monday.  Updates 10:01 AM ET - Tuesday 11/15/22 $VIX EMAs are starting to go sideway This morning's Producer Price Index report (PPI) was cooler than expected. This confirms the direction of the CPI report from November 10. ES NQ RTY all spiked up sharply, but not as enthusiastically as they did post CPI. $VIX hourly chart shows the start of a sideway pattern, the bearish one that we discussed further below. $VIX 20-hour and 50-hour EMA lines are starting to go sideway. This is cause for concern, so we tightened the stop on our TNA runner position. We sent out alert for this right after open. Our position has been stopped out for now. We are going to continue monitoring for further development in $VIX patterns, but no jumping in right now. Updates 12 AM ET - Tuesday 11/15/22 Market breadth Market breadth is still on the high side, but their chart patterns suggest that a pullback is possible this week for ES NQ RTY. $VIX In $VIX hourly chart below we have explained the 2 sets of patterns we are looking for that provide either a bullish setup, or a bearish setup (for stocks) to trade with. You've seen these explanations before. Here they are again because they are very important. We have observed that these patterns do have a tendency to show up during the week of OpEx.
Right now, we don't have either pattern forming just yet. So we plan to just wait and let $VIX chart reveals where market is going next.  Key S/R Levels The S/R levels are still the same as Monday. ES NQ RTY are in consolidation mode, hovering at the bottom of their R1-R2 resistance zone. Again, whether they will successfully rise up to R2 or not will depend on how $VIX pattern evolves as explained above.  Trade Plan It is still our goal to re-enter TNA swing position, but we will wait for the bullish quick $VIX spike described above as the low-risk setup to trade with. Note that if we start observing the bearish sideway pattern described above, we will manually exit TNA runner. Subscribe to get our latest analysis, daily trade plans and live intraday trades. Current trade record here. Disclaimer The information presented here is our own personal opinion. Consider it as food for thought. We are not offering financial advice. We are not promoting any financial products. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections. You are proceeding at your own risk if you follow our trades. |
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