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​
Updates 1:56 AM EST -  Wednesday 12/9/20

Today’s rise in $VIX is not a surprise.  On Monday we shared this $VIX chart with our members to explain that $VIX may be rising soon. 

Last night and earlier today, we discussed how to determine if the current $VIX rise will become a major spike or a head fake.   Access full analysis and our trading strategies for SPY QQQ TQQQ TNA here.

Click here for our Signal Trades.   
Below is a time-delayed excerpt from our live updates for members.

Updates 12:24 AM EST -  Monday 12/7/20

Summary
Short Term:   $NDX $SPX IWM are all likely to continue rising this week as conditions are very bullish right now.

Big Picture:   $VIX $VXN are providing bullish tailwinds for stocks.   But they may get a substantial spike in volatility (VMajor signal)  later next week. 

...​
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Below is a time-delayed excerpt from our live updates for members.

Updates 12:55 AM EST -  Wednesday 12/2/20

Summary
Big Picture:  No VCrash signal on the horizon from $VIX $VXN, but we are monitoring for a possible formation of a VMajor signal.   (A major spike in fear.)

Short Term:   $NDX $SPX are likely to continue rising a bit more.  IWM is now starting to head down short term.
​
Market Internals
Market internals indicate the current bullishness may be waning a bit.
Subscribe to get full access to table of market internal data.

Table of Support & Resistance Zones
Subscribe to get full access to table.

Terminology
We have come up with some labels for different types of $VIX $VXN signals.  We plan to use these labels going forward so you will get a better idea of what we are referring to.

There are 3 types of rise in volatility.

1. VCrash:  an eruption in $VIX $VXN that accompanies a crash.
2. VMajor:  a major spike in $VIX $VXN that reflects serious growing fear.
3. VMinor:  a minor rise in $VIX $VXN that reflects everyday benign worries.

$VXN
As we mentioned above, we are monitoring for a possible formation of a VMajor signal.   A VMajor signal is simply a major spike in fear, similar to the spike levels $VIX $VXN showed from 8/26 to 9/2, and 10/23 to 10/30.

$VXN 2-hour chart below explains what to look for that would confirm a VMajor signal.   If a VMajor signal shows up, $VXN is likely to rise up to its green zone shown below.  Subscribe to get full access to $VXN chart.

$VIX
$VIX 2-hour chart below explains what to look for that would confirm a VMajor signal.  If a VMajor signal shows up, $VIX is likely to rise up to its green zone shown below.  Subscribe to get full access to $VIX chart.

$VVIX
$VVIX is the volatility of $VIX.   When $VIX is dropping, $VVIX does not offer much helpful info for trading.   However, when $VIX starts to rise steadily, $VVIX will pick up on this and starts to show certain patterns.

$VVIX 2-hour chart below explains what to look for that would confirm a VMajor signal.  Subscribe to get full access to $VVIX chart.

$NDX 
We want to make it clear that what $VIX $VXN are forming are just possibly bigger spikes in fear.   They are not forming a crash signal (VCrash).  

So it's really a question of a minor pullback in price due to a VMinor signal, or a bigger pullback in price due to a VMajor signal.   

​$NDX daily chart below shows where we can expect to see price pulls back to.  Subscribe to get full access to $NDX chart.

$SPX
​$SPX daily chart below shows where we can expect to see price pulls back to.  Note that this is the bigger pullback due to a VMajor signal.  Subscribe to get full access to $SPX chart.   

IWM 
IWM 2-hour chart below shows where we can expect to see price pulls back to.  Subscribe to get full access to IWM chart.  

Signal Trades
In an ideal scenario, when the VMajor signal shows up, $NDX $SPX IWM drop correspondingly.   This is ideal because it's predictable.   We can project the timing and scale of the drop based on this ideal scenario.

However, there is a good chance that we won't see this kind of ideal predictability.   There is a chance that when the VMajor signal shows up, $NDX and $SPX may ignore the serious spike in fear, and blithely continue to march up.

This is a bearish divergence, and it happened between 8/26 and 9/3 for $NDX and $SPX.   Afterwards, $NDX $SPX switched to a bullish divergence, ignored the dropping $VIX $VXN signals, and continued their own drop for almost all of September before rising up in price.

Bullish or bearish divergence are simply lag in response time to the signals.  It happens a lot, and it is rather annoying as it makes it hard to time your trades.  

In any event, this is just a heads-up.   $VIX $VXN $VVIX all have to confirm the VMajor signal first.

In Signal Trades:

• If VMajor shows up, we will exit our bullish Big Swing positions, and enter UVXY for the short term.
• When VMajor ends, we will exit UVXY and re-enter bullish Big Swing and Quick Swing positions.

• If VMinor shows up instead, we will hold Big Swing, wait for VMinor to finish to re-enter bullish Quick Swing positions.

Disclaimer
The information presented here is our own personal opinion.  It is intended to supplement your own research and trading systems.  Consider it as food for thought. We are not registered financial advisers or licensed brokers.  We make no guarantee that anything will unfold according to our projections. While we offer scenarios for you to consider in your trade planning, know that you are proceeding at your own risk if you follow our suggestions.  

Why 3x ETFs like TQQQ lose money over the long term
The risks of investing in inverse ETFs
Simple explanations of contango and backwardation ​

Updates 12:54 AM EST -  Monday 11/30/20

Current rise in $VIX $VXN is a VMinor signal
$VIX $VXN rose this morning as we anticipated.   However, they only formed a VMinor signal.   They have already topped out after a brief spike.

$VXN daily chart currently shows a small spike forming.   This is considered a VMinor signal.   $VIX $VXN VMajor signal would be a much bigger spike, one that pushes them at least to their 200-day EMA level.    

Subscribe to get full access to $VIX $VXN charts.

In order for $VXN to form a VMajor signal that accompanies a big sell-off in stocks, $VIX and $VXN first must form a much more definitive V or W bottom on their intraday charts.  They have not formed that yet.   

What $VIX $VXN did this morning was a quick pop and drop.   In fact, the bulls should root for $VIX $VXN to do another quick pop and drop tomorrow, one that is high enough to anchor $VIX $VXN at their 20-day EMA blue lines.   This would be an "anchor to drop" pattern, which would bring back a lot more bullish tailwinds for stocks.

In Signal Trades, we booked some profit earlier by exiting our Quick Swing TQQQ position.   If $VIX $VXN form another "anchor to drop" pattern tomorrow, we will re-enter TQQQ Quick Swing.

Updates 9:55 AM EST -  Monday 11/30/20

Minor rise in volatility
$VIX $VXN are not showing the formation of a VMajor signal yet, but they are rising somewhat.   We consider this a VMinor signal.   

As a result, there's some amount of profit-taking selling in $NDX $SPX IWM.  In Signal Trades, we exited QuickSwing TQQQ, but are holding onto the Big Swing TQQQ and FNGU.

The current rise in $VIX $VXN is likely to be brief as most VMinor signals are.   So it's not a good idea to try to trade UVXY right now.

Updates 11:35 PM EST -  Sunday (for Monday 11/30/20)

Summary
Big Picture:  Conditions are highly bullish for stocks as $VIX $VXN continue to drop.  There are no signs of a potential crash, and while a major spike in fear may come soon, it is not here yet. 

Short Term:   $NDX $SPX are likely to continue rising a bit more.  IWM is now in overbought territory.

The Week Ahead
Tuesday:  Powell speaks starting at 10 AM EST
Friday:   Job report 8:30 AM EST

Next week is FOMC meeting December 15-16.

Market Internals
Subscribe to get full access to table of market internal data.

Table of Support & Resistance Zones
Subscribe to get full access to table.

Terminology
We have come up with some labels for different types of $VIX $VXN signals.  We plan to use these labels going forward so you will get a better idea of what we are referring to.

There are 3 types of rise in volatility.

1. VCrash:  an eruption in $VIX $VXN that accompanies a crash.
2. VMajor:  a major spike in $VIX $VXN that reflects serious growing fear.
3. VMinor:  a minor rise in $VIX $VXN that reflects everyday benign worries.

$VXN
So are there any signs of VCrash right now?   NO.

$VXN weekly chart is a reliable source for VCrash signal.   $VXN weekly chart below shows some yellow highlights.   Those are the VCrash signals since 2016.   We don't have any such VCrash signal right now.   See the chart annotations  below for why $VXN is showing more bullishness.

Subscribe to get full access to $VXN chart.

$VIX
$VIX futures contango is at 9:33% right now.   This is a high number, which implies that there are a lot of tailwinds for $SPX $NDX IWM to rise higher.
​
Still are there any signs of a VMajor signal at least?   Not yet.   A VMajor signal will probably come soon, but it is not here yet.

So what should we look for that would warn us of a VMajor rise?   See the explanations on $VIX 2-hour chart below.

Subscribe to get full access to $VIX chart.

$NDX $SPX
$NDX $SPX charts in different time frames below show how $NDX and $SPX are both in rising channels.   If they follow the boundaries and directions of their channels,  $NDX and $SPX can go quite far by end of the year as shown below.

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IWM 
IWM is in a rising channel too, but it is too steep in the short term.   It is misleading to use this slope for IWM rising channel.   It is more prudent to let IWM drop down a bit, at least to its green support zone, before  buying IWM.

Subscribe to get full access to IWM chart.

Signal Trades
The way to approach trading the current market is to continue riding the bullish momentum, but don't assume that it will last forever.   $SPX $NDX IWM are vulnerable to a quick but major rise in fear (VMajor) soon.   The trick is to stay patient, keep monitoring, and make a plan for your bullish positions for when VMajor shows up.

Our strategy for VMajor signal is to take partial profit by exiting our Quick Swing position at that time.   We will also tighten stops on Big Swing positions.   We may also enter a small Quick Swing UVXY to capture the VMajor rise itself.

Please check Signal Trades for updated stops and sell targets.   Keep in mind that the sell targets are simply projections for now.   We will exit per our strategy above, and the exact exits will depend on when VMajor shows up.
​
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Disclaimer
The information presented here is our own personal opinion.  It is intended to supplement your own research and trading systems.  Consider it as food for thought. We are not registered financial advisers or licensed brokers.  We make no guarantee that anything will unfold according to our projections. While we offer scenarios for you to consider in your trade planning, know that you are proceeding at your own risk if you follow our suggestions.  

Why 3x ETFs like TQQQ lose money over the long term
The risks of investing in inverse ETFs
Simple explanations of contango and backwardation ​

Click here for our Signal Trades.   
Below is a time-delayed excerpt from our live updates for members.

Updates 1:48 AM EST -  Wednesday 11/25/20

Summary
Big Picture:  Conditions are highly bullish for stocks as $VIX $VXN continue to drop.  There are no signs of a potential major spike in fear right now. 

Short Term:   $NDX $SPX are breaking out from their consolidation patterns.  $NDX in particular has some catching up to do so it may rise quite a bit.  Meanwhile IWM is now in overbought territory.

​...​
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​Click here for our recent Signal Trades.   
Below is a time-delayed excerpt from our live updates for members.

Updates 1:36 AM EST -  Tuesday 11/24/20

Summary
Big Picture:  $NDX $SPX IWM are still in an up trend from a big picture perspective.   $VIX $VXN are back to sending out bullish messages as they resume their downward drop.

Short Term:   IWM has been shooting up like a rocket, but $SPX and especially $NDX may not be done consolidating yet.  

Market Internals
Market internals are back to sending out all bullish messages.

Table of Support & Resistance Zones
Subscribe to get full access to table.

$VIX $VXN 
The overall message from $VIX $VXN is quite bullish.  No crash.  No major fear spike in the short term.  

On Monday, $VIX $VXN rose up a small amount early, but that quickly fizzled out.   And now their charts are sending out the bullish message again.

Subscribe to get full access to $VIX $VXN charts.

$NDX 
Monitor the pennant pattern that $NDX has been forming.   This is another way to look at the boundary of the 3-peak consolidation pattern we've discussed before.  

$NDX daily chart below shows some key signals to look for to confirm the potential bullish breakout.

Subscribe to get full access to $NDX chart.

$SPX 
Overall, $SPX pattern is quite bullish.

Subscribe to get full access to $SPX chart.

IWM 
While we entered into a TNA position in Signal Trades, we have some doubts about IWM TNA ability to continue rising so sharply in the short term.   So we recommend tight stops to protect your IWM TNA profit.   

Also take a look at the low-risk bullish setups that IWM typically forms after it has pulled back from a fresh high.   It may be a much better low-risk high-reward setup to wait for the next "pinching" of the 20 and 50-day.

Subscribe to get full access to IWM chart.

Signal Trades
With the renewed bullish messages from $VIX $VXN and market internals, there is no need to hedge our long positions right now.   We have updated the exit targets such that some positions will be Quick Swings and others will be Big Swings.   

Please check Signal Trades for our current positions.   Note the Watch List also.