Updates for Tuesday October 8, 2024

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Updates 4:36 PM ET - Monday
Upcoming key events

VIX VX UVXY surged Monday.  Is the sky falling?
VIX VX UVXY all surged on Monday after a morning pullback.   Is VIX going to skyrocket like August 5?  Is the bear market starting already?

The quick answer is no. The complex answer has to do with how VIX is currently calculated.  You can read more here and here.

VIXCentral.com currently shows M1 VIX futures at 22.5 and in very high backwardation (-8.36% as of this writing).  But this contract expires next week on October 15.  M2 VIX futures expiring November 19 is lower 20.62, and M3 VIX futures expiring December 17 is even lower at 19.92. 

What this tells us is that while volatility is surging right now, it has more to do with hedging ahead of the November 5 election, and not so much because the market is in a panic.  It's not time to turn super bearish, but it makes trading conditions quite difficult.

There is no low-risk setup right now to enter NQ SOXL TNA. We tested SOXL this morning but that got stopped out due to the choppy market conditions and surging VX. 

There is also no low-risk setup to enter SQQQ SOXS TZA or UVXY just yet.   We'll provide updates as we monitor the charts.

​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.