Click here for Signal Trades spreadsheet. Updates 9:40 AM ET - Wednesday Lean bullish but very cautious VIX VX UVXY 20 EMA blue line on their 30-minute charts are still heading down. They have crossed below their 200 EMA green line. This signal makes us lean bullish for now, but UVXY is not dropping rapidly which means something is still up under the hood. Market has just opened so we are giving this signal a bit more time for confirmation. Updates 1:25 AM ET - Wednesday Upcoming key events Click here for macro analysis from WSJ. Bank of Japan intervened According to WSJ: Bank of Japan Deputy Gov. Shinichi Uchida said Wednesday the bank won’t raise interest rates when markets are unstable. In other words, the BOJ has effectively intervened to stabilize Japanese as well as global markets. This may not last forever, but with the Fed plan to cut rates in September, we are likely to see the bulls taking control of the market slowly. VIX VX UVXY are in top formation process Despite the calmer news, VIX is not ready to roll over just yet. VIX spiked up almost 180% on Monday and then dropped 64% on Tuesday. VIX needs to make a couple more upward thrusts, form lower high or same high at least once before it can drop more steadily. So we continue to monitor for the patterns we discussed.
On their respective 30-minute charts, VIX VX UVXY all dropped below their 200 EMA green line, then reversed sharply towards the end of the day to rise above this crucial green line again. This is the start of the 20 EMA blue line and 200 EMA green line convergence. And the intraday V reversal tells us that after some basing around the 200 EMA green line, VIX VX UVXY are all likely to rise in an attempt to retest their previous highs. We canceled UVXY previous buy orders because you never know what may happen overnight. We want to see that blue 20 EMA line turn up first before entering UVXY. We will be monitoring at open for signs of scenario 2 to enter UVXY. 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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