Updates for Friday December 22, 2023

• We trade stock market swings based on VIX, via SVIX UVXY TQQQ TNA and more.
• Current trade record here. ​
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Updates 11:40 AM ET - Friday

Entered into SVIX
As we wrote earlier today, we want to capture VIX dropping from 14.49 down to 11.8. So we entered SVIX earlier this morning.  This is a quick bull trade as VIX is possibly undergoing a big basing period. 

​Updates 12:45 AM ET - Friday

​Upcoming key events
According to WSJ, inflation is closing in on the Fed’s target. Read more about what to expect for Friday's PCE report here.

Key S/R levels
All levels are still the same.

VIX woke up and is now the leading indicator
Before Wed Dec 20, we shared charts which showed warnings of an upcoming dip for ES NQ RTY.  These are the warnings that came true on Wednesday.

• VIX basing to rise to the zone 13.3 - 14.3 >>> it rose to a high of 13.94 on Wed.
• McClellan Oscillator is grinding down to the critical zero level >>> it dropped from a high of 51 on Tue to 12.83 on Wed.
• JNK shows risk appetite has peaked on Dec 14 and is topping in the short term >>> JNK continues to fill out the top.
• ES NQ RTY dipped on Wed Dec 20.

VIX has woken up at last.  We now can use it as the leading indicator to guide us for the next few weeks.  

We have been writing about VIX spiking up to 14.3 for the short term.  It rose to 14.49 on Thu Dec 21.  We think that is VIX top for now until early Jan.   

We expect VIX to drop on from 14.49 high to retest 11.8 again between now and the first week of Jan. While VIX drops, McClellan Oscillator (Stockcharts.com $NYMO) is likely to grind downward but still stay positive. With this confirmation, ES NQ RTY should recover and likely to surpass resistance at R1 as part of the Santa Claus rally.  This could start as early as Fri Dec 21 and may last into the first week of Jan.

Once VIX drops down to 11.8, if it anchors at this level and starts to rise, VIX can reach as high as 15.5.  If McClellan Oscillator swings negative also, then ES NQ RTY will drop and may retest support at S2. 

However, if VIX continues to drop below 11.8, then ES NQ RTY will spike up to resistance at R2.

Our personal trade plan
We now want to capture VIX dropping from 14.49 down to 11.8 via SVIX.  

Then if VIX anchors at 11.8 and then starts to rise, we'll aim to capture the rise in VIX from 11.8 to 15.5 with UVXY. 
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​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.