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.)
Explanation of Indicators
Background info on $VIX, $VVIX, ES, NQ RTY
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.
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.