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Click here for our Signal Trades. See FAQ for more explanations on terms, labels and abbreviations that we use. Below is a time-delayed excerpt from our live updates for members. Updates 3:02 PM EST - Friday 8/28/20 $SPX may rise a bit higher short-term Of all the indices, $SPX is the most bullish right now. It looks poised to rise a bit higher, most likely to tag the the top of its orange resistance zone at 3520 (see S/R table below). This may happen on Monday. Personally we like to buy on pullbacks for everything. "Buy low" or "Buy relatively lower" enables us to maximize our profit and minimize our risk. So we are not going to chase price up in the Signal Trades, especially not before the weekend. There will be plenty of opportunities to trade next week. $VIX $VXN are no longer dead. As they swing back and forth between (1) and (2), there will be opportunities to make money. This morning quick ride upward with UVXY in Signal Trades demonstrated this. In fact, there most likely won't be setups to buy and hold for a few days, to enjoy a ride that lasts multiple days. As long as $VIX $VXN are swinging between (1) and (2), market will be choppy. So to capture profit, we have to be nimble with our entries and exits. Updates 9:18 AM EST - Friday 8/28/20 $VIX $VXN may rise a bit more this morning The (1) (2) moves that we discussed at 1:35 AM EST are unfolding. $VIX pre-market signals show it's likely to rise up to retest its Thursday high this morning, rising possibly to 28. This means $SPX $NDX IWM are likely to pull back as $VIX rises. They will most likely retest their Thursday lows. So the low-risk entry point for $SPX $NDX short-term long positions are near their Thursday lows. You can enter UVXY for a quick ride up along with $VIX at the start. Keep in mind it most likely will reverse quickly. Signal Trades:
Updates 1:35 AM EST - Friday 8/28/20 $VIX is transitioning $VIX daily chart below shows how $VIX has formed a solid support zone above 20.5. This is similar to the $VIX support zone formed in late 2019 early 2020. Members get full access to in-depth nightly analysis. SUBSCRIBE now to read the rest of this post and gain full access to all our analysis and live signals. Take advantage of our introductory low rate of just $39/month. You can cancel anytime.
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Click here for our Signal Trades. See FAQ for more explanations on terms, labels and abbreviations that we use. Below is a time-delayed excerpt from our live updates for members. Updates 12:50 PM EST - Thursday 8/27/20 Selling is accelerating Well well well! Our prediction is coming sooner than we expected. What we wrote at 12:04 PM EST is coming true. ...we are expecting $SPX $NDX IWM to drop lower in their channels soon, possibly to their green support zones before they find enough buyers to resume the rise. So it was a wise move not to be fooled by $SPX $NDX morning head fake. Alas UVXY reversed too fast for us to re-enter. At this point, we have clear confirmation that $SPX $NDX IWM are going to continue the short-term selling process. We will monitor for pullbacks in $VIX $VXN to enter UVXY. By the way, we prefer UVXY right now rather than the inverse ETF such as SQQQ TZA SPXS. This is because $VIX $VXN movements are more reliable than $SPX $NDX IWM right now. You can't trust stock prices, but you can trust volatility any day. Updates 12:04 PM EST - Thursday 8/27/20 $SPX $NDX IWM: short-term upside is limited As you know our trading system is based primarily on the messages sent out by $VIX $VXN. When both of these indices send out the same message, it's usually a big signal for a directional change in $SPX $NDX IWM. This morning $VIX $VXN have been sending out fluctuating mixed messages. However, they do have one underlying theme. VIX $VXN are transitioning to climb higher. But before they can do so with strong momentum, they must anchor themselves in their own short-term support zones. So $VIX $VXN are spending today probing for these support zones. While $VIX $VXN are doing this, we get a lot of short-term fluctuation in $SPX $NDX IWM as well. There is a good chance that $SPX $NDX will try to climb higher today and Friday. They have been rising despite the bearish divergence from market breadth and volatility. So they may very well continue to do so. In our experience, this is a high-risk low-reward setup. So we are choosing not to chase $SPX $NDX up at this point. Our Signal Trades have generated some handsome profit this week, and we prefer to keep it rather than give it back to the market by overtrading. By the way, please note that we are not saying there will be a huge sell-off. We are not saying Dive2 is here. We are not saying $SPX $NDX IWM up channels are coming to an end. But we are expecting $SPX $NDX IWM to drop lower in their channels soon, possibly to their green support zones before they find enough buyers to resume the rise. Updates 10:09 AM EST - Thursday 8/27/20 Get out of short-term long positions The sell-off is accelerating for $SPX $NDX IWM. We are scaling into UVXY. Updates 10:01 AM EST - Thursday 8/27/20 Conflicting $VIX and $VXN
This mixed message results in rising $SPX IWM and a more bearish $NDX right now. We are not comfortable entering into long or short positions when $VIX $VXN are not sending out the same message. We are not seeing any low-risk setups right now for long or short entries. So we are staying in cash this morning and continuing to monitor for setups. We will post updates if the setups start to form. Updates 9:39 AM EST - Thursday 8/27/20 Stimulus is here to stay From WSJ: “While the Fed didn’t change its inflation target, it made an important and widely anticipated shift by stating that if inflation runs below 2% following economic downturns, it will seek to hold longer-term inflation expectations steady by seeking periods of inflation above 2% when the economy is stronger.” In other words, no pre-emptive move by the Fed to withdraw stimulus if inflation starts to rise and gets close to 2%. Fed will let inflation run higher than 2% to juice the much needed extra growth. Market's response:
We are monitoring for the other scenario where $VIX $VXN will form a spiky top and start to drop back down into their channels. This would be a bullish setup for $SPX $NDX. It would provide us with a short-term pullback to re-enter $SPX $NDX long positions, and to continue capturing the short-term up swing that started on 8/20. However, the setup is not here yet. Proceed with caution. It is not necessary to trade constantly. We are looking for low-risk setups as always. Updates 9:10 AM EST - Thursday 8/27/20 Waiting for Powell $SPX $NDX IWM are not gapping up this morning. Instead they are stuck pretty much where they left off. The same is true with $VIX. This tells us that market participants are awaiting Powell's speech at 9:15 AM EST. Similar to FOMC announcement, this speech has a way of moving prices sharply. Monitor for this scenario during or post speech:
When this combination happens, it is a setup for $VIX $VXN to rise up higher. We will be looking for low-risk setup to enter UVXY for a short-term up swing. Updates 1:05 AM EST - Thursday 8/27/20 High Probability of Selling On Thursday We discussed in our post late Wednesday the fact that $SPX $NDX were breaking out against growing bearish divergence. There is a high probability that $SPX $NDX will gap up at open on Thursday. At the same time, if $VIX $VXN continue to rise sharply above their 200-hour EMA lines on Thursday, it's a lot of bearish headwinds for $SPX $NDX IWM. So there is a high probability that $SPX $NDX will do an intraday reversal on Thursday and start to drop. Expect to see some selling on Thursday, not enough to drop $SPX $NDX down to their green zones yet. But the selling process is likely to start. Table of Support & Resistance Zones This table has been updated with new orange and green zones. ... Members get full access to in-depth nightly analysis. SUBSCRIBE now to read the rest of this post and gain full access to all our analysis and live signals. Take advantage of our introductory low rate of just $39/month. You can cancel anytime. Click here for our Signal Trades. See FAQ for more explanations on terms, labels and abbreviations that we use. Below is a time-delayed excerpt from our live updates for members. Updates 2:00 PM EST - Wednesday 8/26/20 Available for members. Updates 9:23 AM EST - Wednesday 8/26/20 Short Term Up Swings To Continue On Wednesday Pre-market reading of $VIX indicates that it's very likely going to drop a good chunk today. This means bullish tailwinds helping $SPX $NDX IWM to rise today. There may be a minor pullback in price for $SPX $NDX IWM to start the day. This will correspond to a minor rise in $VIX $VXN to start the day. Note that the short-term up swing for $SPX $NDX IWM may end by end of day today. We will monitor and report later. Click here for our Signal Trades. Updates 12:30 AM EST - Wednesday 8/26/20 Short Term Up Swings To Continue On Wednesday $SPX $NDX IWM had a minor pullback early morning as we anticipated pre-market. This provided a low-risk set up to enter short-term swing positions. $VIX $VXN charts at this point show that they are likely to drop on Wednesday. This means that we should expect to see $SPX $NDX IWM rise some more for most of Wednesday. Members get full access to in-depth nightly analysis. SUBSCRIBE now to read the rest of this post and gain full access to all our analysis and live signals. Take advantage of our introductory low rate of just $39/month. You can cancel anytime. Click here for our Signal Trades. See FAQ for more explanations on terms, labels and abbreviations that we use. Below is a time-delayed excerpt from our live updates for members. Updates 9:23 AM EST - Tuesday 8/25/20 Pre-market Signals $VIX is likely to rise up and do a quick retest of the zone between 22.5 and 23. This means $SPX $NDX IWM will pull back a bit this morning, before resuming their rise. The key is to monitor for how high $VIX $VXN rise up in the channels. If they rise up but stay within their channels, it is a bullish setup for $SPX $NDX IWM. Signal Trades:
Updates 1:30 AM EST - Tuesday 8/25/20 Members get full access to in-depth nightly analysis. SUBSCRIBE now to read the rest of this post and gain full access to all our analysis and live signals. Take advantage of our introductory low rate of just $39/month. You can cancel anytime. Click here for our Signal Trades. See FAQ for more explanations on terms, labels and abbreviations that we use. Below is a time-delayed excerpt from our live updates for members. Updates 3:50 PM EST - Friday 8/21/20 ... Updates 2:18 PM EST - Friday 8/21/20 ... Updates 10:02 AM EST - Friday 8/21/20 Short Term Both $VIX $VXN appear to have finished their morning tests of their upper channel edges. They are likely to drop down into the lower zones of their channels now. This means $SPX $NDX are likely to climb higher from here. Updates 9:43 AM EST - Friday 8/21/20 Short Term Both $VIX $VXN are likely to retest the upper edge of their channels again this morning.
If $VIX $VXN don't exceed these upper edges, those are low-risk places to enter long positions based on $SPX $NDX. Updates 9:19 AM EST - Friday 8/21/20 Short Term Overnight $VIX tagged its upper channel edge. As we discussed, that's a bullish setup for $SPX $NDX. IWM is likely to rise a bit today too, but it is continuing a steady march down. This bearish divergence is an advanced bearish warning, consistent with the advanced bearish warnings issued by market internals. Again, keep this in mind for the big picture, but focus on trading the short-term swings. It looks like for $SPX $NDX, their up swings aren't quite done yet for today. They are likely to climb a bit higher. Updates 12:00 AM EST - Friday 8/21/20 ... SUBSCRIBE now to read the rest of this post and gain full access to all our analysis and live signals. Take advantage of our introductory low rate of just $39/month. Click here for our Signal Trades. See FAQ for more explanations on terms, labels and abbreviations that we use. Below is a time-delayed excerpt from our live updates for members. Updates 3:20 PM EST - Thursday 8/20/20 Short Term $VIX is still dropping sharply, but $VXN has started to go sideway from the initial drop this morning. Our recommendation is to tighten stops on your $SPX $NDX IWM short-term bullish positions and think about taking partial profits. There is no guarantee that $VIX $VXN won't start climbing again tomorrow, and cause $SPX $NDX IWM to drop again. Updates 9:46 AM EST - Thursday 8/20/20 Short Term $VIX formed a top at the top edge of its channel. If you look at $VIX hourly chart that we showed you at 12:55 AM today, this means that $VIX is likely to drop back lower in the channel. This is a short term bullish setup for $SPX $NDX IWM. It does not necessarily mean that $SPX $NDX IWM are ready to surge much higher. But there is a bullish respite. $SPX $NDX IWM are likely to retest their recent highs, but understand that the underlying mood for the bigger picture is transitioning to bearish. Updates 9:22 AM EST - Thursday 8/20/20 Short Term $VIX gapped up overnight and tagged the top of its yellow channel briefly. It pulled back a bit but is climbing back up towards this top edge again. $SPX $NDX IWM are all gapping down. There is a high probability of $VIX surging out of the channel by a small amount. Then it may still drop back into the channel, but overall this action will lift $VIX EMA lines upward, preparing for its eventual rise out of the channel. What this means is some amount of selling will start today. $SPX $NDX IWM are likely to get down to their green support zones to search for new buyers. This is the first line of defense for $SPX $NDX IWM. We expect that $SPX $NDX IWM will find some support here at least initially. Updates 12:55 AM EST - Thursday 8/20/20 ... SUBSCRIBE now to read the rest of this post and gain full access to all our analysis and signals. Take advantage of our introductory low rate of just $39/month. Click here for our Signal Trades. See FAQ for more explanations on terms, labels and abbreviations that we use. Below is a time-delayed excerpt from our live updates for members. Updates 1:21 PM EST - Friday 8/7/20 Short Term 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 Short Term 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 Short Term $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 Short Term
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 Subscribe for full analysis 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. Click here for our Signal Trades. See FAQ for more explanations on terms, labels and abbreviations that we use. Below is a time-delayed excerpt from our live updates for members. Updates 9:09 AM EST - Thursday 8/6/20 Short Term
Updates 12:50 AM EST - Thursday 8/6/20 Short Term: $VIX $VXN Short Term: $SPX $NDX IWM Short Term Support & Resistance Zones Subscribe for full analysis Short-term Trade Setup The last significant signal from $VIX was the bullish reversal for $SPX $NDX $RUT on 7/30. Since then, despite issuing minor bearish signals every morning, $VIX has not issued a major bearish signal to end the current short-term bullish mood. We don't expect to see this major bearish signal on Thursday based on the message from $VIX $VXN. But there is a probability of $VIX showing a minor bearish signal to start the day, similar to Wednesday. For $SPX $NDX $RUT, this means a possible minor pullback to start, followed by bullish reversal. SUBSCRIBE now to read the rest of this post and gain full access to all our analysis and signals. Take advantage of our introductory low rate of just $39/month.
Click here for our Signal Trades. See FAQ for more explanations on terms, labels and abbreviations that we use. Below is a time-delayed excerpt from our live updates for members. Updates 11:23 AM EST - Friday 7/31/20 Short Term $VIX is likely to be done rising for today. However, it is unlikely to drop below 23.5. $VIX came close, reaching 23.6 pre-market. But like magic, $VIX immediately rose up from there. $VXN (Nasdaq volatility) gapped down big at open and immediately reversed upward. That's a highly bearish signal for $NDX. IWM dropped down hard this morning, indicating growing weakness in small caps. $VIX is likely to continue grinding towards the tip of its pennant. And $VIX is also likely to continue testing its support zone from 23.5 to 25. And as we've been saying, as long as $VIX stays above 23.5, it is building up its bearish headwinds for stocks. So when $VIX reaches the tip of its pennant next week, there is a good chance that it may break out from there. Next week is the start of August. August is the worst month for the S&P 500 since 1987, according to the Stock Trader’s Almanac. Keep all this in mind, but we do not recommend holding UVXY right now. This is due to contango. Contango is running close to 10% right now, so UVXY will drop in value each day you hold it. The current condition is not conducive for holding long or short. Market is undergoing some changes under the hood. Best strategy right now is TMAR (Take Money And Run). Take whatever the market gives you and be happy walking away with it. Updates 9:42 AM EST - Friday 7/31/20 Short Term
However, $VIX is unlikely to break out from its pennant pattern just yet. It may only reach up into the zone between 27 and 28 today. Updates 9:17 AM EST - Friday 7/31/20 Short Term $VIX signal is unclear right now. It is forming the kind of pattern that precedes an upward reversal. But it is not done forming this pattern yet. So we have to allow for it to fully form. $SPX $NDX appear to be stuck at the highs form after hours on Thursday. During the night, ES and NQ hardly moved after the post-earnings pop. This indicates a lack of buyers as well as sellers. IWM has gapped down, so we should pay close attention to TZA. Updates 1:55 AM EST - Friday 7/31/20 Breakout? Maybe not AMZN and AAPL earnings announcements after hours resulted in a big surge for $NDX $SPX. $NDX reached to the top of the previous orange zone. However there wasn't follow-through buying in futures Thursday night. Additionally, UVXY dropped down sharply after hours but anchored in an important support zone. Between 7/21 and 7/30, UVXY has anchored 5 times in this support zone. This is happening despite UVXY high contango value, and the sharp surge in $NDX $SPX. So there is a good chance that $VIX will not drop below 23.5 on Friday. $VIX 2-hour chart below shows $VIX is getting to the end of a pennant pattern. It shows that $VIX has formed 4 anchors at this point in $VIX support zone between 23.5 and 24.8. This kind of “anchor to rise” $VIX pattern tends to precede a breakout from the pennant. So we should keep this possibility in mind. The breakout in $VIX isn't a guarantee, but is a high probability. .... SUBSCRIBE now to read the rest of this post and gain full access to all our analysis and signals. Take advantage of our introductory low rate of just $39/month.
Click here for our Signal Trades. See FAQ for more explanations on terms, labels and abbreviations that we use. Below is a time-delayed excerpt from our live updates for members. Updates 1:24 PM EST - Wednesday 7/29/20 Short term There is a high probability that $SPX $NDX IWM will attempt to rise into the lower part of their orange resistance zones after FOMC today. And $VIX $VXN may do a sharp drop before they anchor themselves again. $VIX may drop below 23.5. So monitor for this bullish opportunity to exit long $SPX $NDX IWM. Do not enter short yet. We need $VIX $VXN to demonstrate they are ready to rise first. Updates 9:16 AM EST - Wednesday 7/29/20 Short term We have mixed signals right now. $VIX dropped into key zone between 23.5 and 24.5 and promptly started rising. It formed yet another "anchor to rise". This means bearish headwinds are building up for $SPX $NDX IWM. $SPX $NDX IWM are all forming bullish patterns pre-market, indicating they too are ready to rise, most likely at least to the highs of Monday 7/27. So it appears that $SPX $NDX IWM are ready to rise despite the bearish headwinds building up. Do not initiate new positions. Our Signal Trade is targeting to exit long in the orange resistance zone. No low-risk high-reward setup to enter short yet. Updates 1:30 AM EST - Wednesday 7/29/20 Subscribe for full analysis SUBSCRIBE now for full access to all our analysis and signals.
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