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Click here for Signal Trades spreadsheet. Updates 2:32 PM ET- Wednesday 3/1/23 $VIX $VVIX: look for lower highs $VIX and $VVIX are both currently forming setups to rise up one more time. We expect them to rise. However, if $VIX does not exceed 23, and $VVIX does not exceed 100, it's a very bullish setup for stock's next move. As a result of this quick volatility spike, ES NQ RTY are going to drop closer to S1. So we are not going to scale into TQQQ and TNA until this retest of S1 is successful for ES NQ RTY. Meanwhile, we are going to trade a quick TZA position to capture this quick volatility spike. Note that we're waiting for TZA to retest today's low before entering. No chasing as this is a quick trade. Click here for Signal Trades spreadsheet. Updates 1:40 AM ET- Wednesday 3/1/23 Key S/R levels The table below is the same as yesterday.   The indicators are tilting bullish, but not 100% bullish. Before we enter a bull position, we want to see:
Choppy sideway markets are the toughest to trade. They really try our patience. Even day traders have a hard time with intraday chops as well as multi-day choppiness. But out of choppy sideway conditions will come a big directional move. So be patient. Projections
Our personal trade plan Same basic plan to scale into TQQQ and TNA when NQ and RTY retest Friday's lows. Note that we've pushed the entry prices down a bit to accommodate a possible sharp dip which typically is a bear trap. Click here for Signal Trades spreadsheet. Questions? For new members who may not be familiar with the information we post in this blog, please check the glossary for more information. You can also email us with questions directly. 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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Click here for Signal Trades spreadsheet. Updates 12:45 AM ET- Tuesday 2/28/23 Key S/R levels The table below is the same as yesterday.   As you can see from the table above, the indicators are starting to tilt bullish. The key to look for is ES NQ RTY spending some time basing. This builds up bullish momentum. Bulls should be wary of any sharp spike back up to R2 right now. That's a bearish setup that can send ES NQ RTY down to S2 quickly. During the day on Monday, we posted RTY 4-hour chart to show you the bullish setup and the bearish setup to look for. Here is another view. NQ 30-min chart below shows the pattern that bulls want to see.  Projections
Our personal trade plan It looks like ES NQ RTY are basing in bullish support zones just below R1. We are looking for retest of the lows of this zone to scale into TNA and TQQQ. We will scale into TQQQ first, and TNA on another date. Click here for Signal Trades spreadsheet. Questions? For new members who may not be familiar with the information we post in this blog, please check the glossary for more information. You can also email us with questions directly. 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. Click here for Signal Trades spreadsheet. Updates 2:10 PM ET- Monday 2/27/23 Monitoring for this bullish setup It looks like ES NQ RTY are basing in bullish support zones just below R1. We are looking for retest of the lows of this zone to scale into TNA and TQQQ. (See spreadsheet for buy orders.)  Updates 8:30 PM ET- Sunday Upcoming key events Though this week has a number of economic reports, the true market moving event will be the job report next Fri Mar 10.  Earnings this week Chart courtesy of Earnings Whispers.  What, me worry? Bears should take note of the muted reactions to negative economic news lately. Feb 14 CPI was higher than expected, as was Feb 24 PCE. FOMC minutes on Feb 22 were highly hawkish. However, none of these events caused a major sell-off or a nosedive to the bottom. One could argue that the price actions of ES, NQ, and RTY since Feb 2 have been a way for the market to process the overly enthusiastic buying since the start of the year. As we wrote on Friday, traders don't appear to be panicking. There is no rush to buy puts, no panic selling, and no priming for Black Monday. It seems that high inflation and high interest rates for longer periods of time are becoming the norm for the market. This combination is getting baked into price actions, and it will likely take much more dramatic events to cause panic in the market. Key S/R levels All support levels have been updated to reflect the current sell-off.     Projections
As the charts above show, $VIX and $VVIX will need time to form the bearish W bottoms in order to really surge. Until $VIX $VVIX form such patterns, we are going to lean bullish with ES NQ RTY. Furthermore, if $VIX $VVIX fail to form the bearish W bottoms, ES NQ RTY will take off even more. Our personal trade plan It seems to us that the best strategy is to wait for ES NQ RTY to form a bullish setups on their intraday day charts (30-min) to scale into multiple bull positions. We are monitoring the 20 EMA on these charts and waiting for W bottom patterns to form. We may enter a quick bear position if we observe a highly bearish intraday setup. As of right now, there is no such pattern. We understand the desire to trade frequently and capture every swing in the market. However, given current market conditions, unless we are day trading, we are likely to get stopped out from short-term, choppy conditions. Therefore, we are choosing to wait for intraday setups to form before taking any positions in either direction. Click here for Signal Trades spreadsheet. Questions? For new members who may not be familiar with the information we post in this blog, please check the glossary for more information. You can also email us with questions directly. 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. Click here for Signal Trades spreadsheet. Updates 1:21 PM ET- Friday 2/24/23 Summary of signals Here is an updated look at the indicators. Despite concerns over the hot PCE report, traders don't appear to be panicking. No rush to buy puts. No panic selling. No priming for black Monday. We are personally not entering any bear position right now. If the bear trend persists, the better setup to enter bear position is when $VIX and $VVIX are done basing.  Updates 11:02 AM ET- Friday 2/24/23 Multi-day signal: bearish, but .... According to CNBC: The core personal consumption expenditures price index, the Fed’s preferred measurement of inflation, rose 0.6% in January and 4.7% from the prior year, coming above economists’ expectations. The report added to worries that the Fed may have to keep rates higher for longer to quell inflationary pressures. This report caused ES NQ RTY to drop lower this morning. Our multi-day signal remains bearish (as shown in the table last night) because:
Should we enter bear position here? This morning's drop is not a good setup to enter short because:
We think it is better to wait for $VIX to dip back to 20, or at least form some kind of intraday bottoming pattern before entering bear position. Our job is not to predict every possible move in the market. Our job is to wait for the low-risk, high-reward, high-probability setup to form and then take advantage of them. The bearish setup we want to see is this:
Until then, entering bear position risks getting stopped out. Updates 1:00 AM ET- Friday 2/24/23 Key S/R levels All levels are still the same as yesterday.   ES NQ RTY have found support at S1, and are trying to climb back up towards R1. They came close on Thursday. They are likely to try again on Friday, and may even surge past R1 a little bit. However,... $VIX complicated basing pattern >> volatility surge $VIX 2-hour chart below suggests a strong possibility of a volatility surge, after multiple weeks of basing since Feb 2. Observe how $VIX 200 EMA green line is going sideway. This means $VIX is basing to rise. Basing means dip rise dip rise until $VIX is ready to surge. $VIX is still on its dip path, and will likely reach into the zone 19-20 by Feb 28 or Mar 1. Then $VIX is likely to surge out of that base to get up to the zone 27-28, possibly by Mar 17 OpEx before volatility starts to drop again. When $VIX surges towards 27-28 is when ES NQ RTY will drop to S2.  Our personal trade plan Our TNA position got stopped out just before TNA reversed which of course is painful. We chose not to chase a re-entry here as $VIX is getting down close to its 19-20 reversal zone. When $VIX and $VVIX both show intraday reversal patterns, we'll be looking to scale into TZA. We think bearish reversal will happen when RTY reaches 1940-1950. This is approximately TZA at 25 - 25.5 zone. But the key here is $VIX and $VVIX forming intraday bottoming pattern. No entry without this. Manual entry if seen. Click here for Signal Trades spreadsheet. Questions? For new members who may not be familiar with the information we post in this blog, please check the glossary for more information. You can also email us with questions directly. 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. Click here for Signal Trades spreadsheet. Updates 1:50 PM ET- Thursday 2/23/23 Stopped out of TNA; bounce is still on but weak Our TNA position got stopped out just before TNA reversed which of course is painful. Bounce is still happening, but may be quite weak. We don't want to chase a re-entry here as the risk of reversal is high. Should we enter bear position here? We are monitoring for bearish setup to enter SQQQ. So far, we have not seen any high-probability bearish setup yet as $VIX and $VVIX are both still dropping. Until $VIX $VVIX messages become more obvious, and in agreement with market breadth charts as well as ES NQ RTY price action charts, the probability of a big drop to S2-S3 zone is low. Updates 1:00 AM ET- Thursday 2/23/23 Key S/R levels We lowered S3 level for ES NQ RTY. In the most bearish case, ES NQ RTY could drop all the way down to S3. But support at that level is very strong.   Pre-market Wednesday, we wrote: For Wednesday, ES NQ RTY may bounce. But they are unlikely to rise much higher than the new R1. ES NQ RTY will then drop down to at least S2 before the current sell-off is done. The projected bounce came at the end of the day, after market delivered a head fake for the bears post FOMC minutes. NVDA earnings after hours earnings news also helped to deliver the additional upward momentum. But as we said, R1 is fairly strong resistance, and ES NQ RTY may not be able to push above this level. Even if they do a little bit, they are likely to drop down to S2 by next Tuesday Feb 28. However, by Mar 1, we should see ES NQ RTY find support at S2 and begin a multi-week climb back up to R1. Keep an eye on bullish $VVIX $VVIX has formed a 2nd lower high top on its daily chart similar to the 2nd top formed on Oct 13. That was a very bullish setup for stocks. if $VVIX keeps dropping and goes to a lower low, it is quite bullish for stocks.  Our personal trade plan
Click here for Signal Trades spreadsheet. Questions? For new members who may not be familiar with the information we post in this blog, please check the glossary for more information. You can also email us with questions directly. 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. Click here for Signal Trades spreadsheet. Updates 4:50 PM ET- Wednesday 2/22/23 Scaled into TNA after hours Multi-month signal: bullish Multi-day signal: bearish, but a bounce is very likely. We scaled into 1/2 position of TNA because RTY successfully retested S1 at 1890. This is a quick trade.  Updates 2 AM ET- Wednesday 2/22/23 Multi-month signal: bullish ES NQ RTY are currently not showing setups that increase the likelihood of them crashing below Oct 13 lows.
Key short-term S/R levels We've updated the S/R table to show short-term key levels that ES NQ RTY will have to navigate over the next couple of weeks.  Multi-day signal: bearish For Wednesday, ES NQ RTY may bounce. But they are unlikely to rise much higher than the new R1. ES NQ RTY will then drop down to at least S2 before the current sell-off is done.  $VIX and market breadth $VIX concurs with this bearish path projection. $VIX 2-hour chart below shows that it is likely to dip quickly back to 20 then surge up. $VIX may reach the zone 27-28 by the time ES NQ RTY reach S2. The daily charts of S&P 500 and Nasdaq Advance Decline Percentage support this bearish projection.  Our personal trade plan We plan to re-enter SQQQ when NQ retests R1 at 12266. Note that NQ may rise higher than R1 a bit, so we have a series of SQQQ orders with successively lower buy price. These will get deployed if the higher level order get stopped out. Click here for Signal Trades spreadsheet. Questions? For new members who may not be familiar with the information we post in this blog, please check the glossary for more information. You can also email us with questions directly. 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. Click here for Signal Trades spreadsheet. Updates 2:26 PM ET- Tuesday 2/21/23 Signal summary As discussed below, on a multi-month basis, our key indicators are still bullish. On a multi-day basis, today ES NQ RTY began their drop to S2-S3 zone without first retesting R1 (as we were expecting). $VIX gapped up this morning, out of the base below 21. But $VIX is running into resistance at 23. So we are likely to see it dip back to the zone 19-20, before building up more momentum to surge up to 27-28 zone possibly.  Trading strategy In response to $VIX surge, ES NQ RTY all dropped. But as $VIX is running into resistance at 23, ES is approaching key support at 4000 (S2). A quick bounce is likely to occur at this level. The setup to enter ES NQ RTY quick bounce is not here yet based on the charts. We'll need to monitor closely at open tomorrow for this bullish setup. Note that this quick bounce may not rise any higher than Friday's high (ES at 4096). So to be prudent, it should be just a quick bull trade. After ES NQ RTY quick bounce, we will look for signs of $VIX ready to surge out of a base. This typically is a multi-day basing process. When $VIX is ready to surge from its base, we will enter a bear position via SQQQ. Updates 1:45 AM ET- Tuesday 2/21/23 Upcoming key events FOMC minutes on Wednesday may be closely monitored for indication of how much higher and how much longer will the Fed keep with raising rates. Read more here.  Earnings this week Chart courtesy of Earnings Whispers.  Key S/R levels Note the new R1 level.  Are ES NQ RTY going to crash below Oct 13 low soon? Not right now. As we discussed on Friday, ES NQ RTY are currently not showing setups that increase the likelihood of them crashing below Oct 13 lows.
 Will ES NQ RTY have a big dip starting this week? Yes, there is a good chance that ES NQ RTY will finish forming a short-term top Tue-Wed. There is a strong possibility that we may see something like this scenario unfolding between now and March OpEx.
$VIX daily chart below shows $VIX 20-day EMA blue line going sideway. That's a basing pattern, and we should expect a spike from that base. The spike may take $VIX up to 25-26. While $VIX spikes, ES NQ RTY will drop, likely down to S2-S3.  Our personal trade plan We plan to re-enter SQQQ when it swings back down to last week's low again, around 33.50. Click here for Signal Trades spreadsheet. Questions? For new members who may not be familiar with the information we post in this blog, please check the glossary for more information. You can also email us with questions directly. 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. Click here for Signal Trades spreadsheet. Updates 2:30 PM ET - Friday 2/17/23 Is the market going to crash next week? No, because:
Is the market going to have a big dip next week? Maybe some selling on Tue. But if $VVIX does not exceed 100 by Wed, we actually may see a bounce that brings ES NQ RTY back up close to R1 again by early March. Then we may see traders piling into puts to hedge ahead of the job report on March 10. How do we plan to trade this personally? It's a bit risky to jump into any full-size position ahead of a long weekend. But we'll be monitoring $VVIX and $VIX for signs of easing volatility. We'll scale into TNA when $VVIX and $VIX start to head down again. We'll scale out of TNA when $VVIX and $VIX start to rise again. Have a great weekend! Updates 2:15 AM ET - Friday 2/17/23 Key S/R levels All support levels have been lowered to reflect the short-term bearish message from our indicators.  Summary of indicators We have some mixed signals happening, so it's important to spell out what each one is saying.  $VVIX is not in full agreement with the other indicators. $VVIX also tends to lead the others. So there is a chance that we will continue to see choppiness while the indicators sort themselves out. It will be interesting to see how high $VVIX reaches if it does spike at all on Friday. If $VVIX does not exceed 100 by Wednesday, it is likely to resume its down trend which means volatility will start to drop, providing bullish tailwind for stocks. Our personal trade plan Conditions will be choppy, and we're also waiting for $VVIX signal to resolve with the rest of the indicators. So no order for now. Keep in mind also that Monday is a market holiday. We prefer not to open full-size position ahead of 3-day weekend. Click here for Signal Trades spreadsheet. Questions? For new members who may not be familiar with the information we post in this blog, please check the glossary for more information. You can also email us with questions directly. 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. Click here for Signal Trades spreadsheet. Updates 1:00 PM ET - Thursday 2/16/23 Key S/R levels All support levels have been raised to reflect current bullish momentum.  Summary Despite the threat of higher rates for longer periods due to inflation, $VIX failed to rise post CPI. Market breadth failed to drop. ES NQ RTY failed to drop. These are bearish failures which means the bulls are back in charge. We were anticipating a dip big enough post CPI to bring ES down to retest 4000. It turns out the dip happened before CPI on Feb 10 when ES dropped to 4060. Now the bullish momentum is back, supported by both $VIX and market breadth. So the best strategy now is to scale in to bull positions during more shallow dips. We plan to scale into TQQQ when NQ retests the new much more shallow support zone S1 - S2 (12250 - 12400). Our personal trade plan
Click here for Signal Trades spreadsheet. Questions? For new members who may not be familiar with the information we post in this blog, please check the glossary for more information. You can also email us with questions directly. 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. Click here for Signal Trades spreadsheet. Updates 7:42 PM ET - Wednesday 2/15/23 Stopped out of SQQQ Despite the threat of higher rates for longer periods due to inflation, $VIX failed to rise today. Market breadth failed to drop. ES NQ RTY failed to drop. These are bearish failures which means the bulls are back in charge. We got stopped out of SQQQ. And we now have permission to buy the dip again. We'll post more analysis and trade plan tonight.  Click here for Signal Trades spreadsheet. Updates 12:00 AM ET - Wednesday 2/15/23 CPI came in at 6.4%, slightly higher than expected 6.1% You can read more about CPI report and implication here. Key S/R levels S/R levels are still the same for ES, NQ and RTY.  Summary We think ES NQ RTY will follow this sequence below.
$VVIX needs to form a 2nd top before volatility is done rising  Market breadth charts show a lower-high top This usually leads to multi-day pullback in price for stocks.  Our personal trade plan We scaled into SQQQ after CPI report on Tuesday. We plan to hold SQQQ for a 15% profit target. Click here for Signal Trades spreadsheet. Questions? For new members who may not be familiar with the information we post in this blog, please check the glossary for more information. You can also email us with questions directly. 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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