Click here for Signal Trades spreadsheet. Updates 1:52 PM EST - Friday 7/30/21 Volatility ebbing for now. Money flow coming into stocks
For these reasons, we decided to enter TQQQ for now. Updates 2:30 AM EST - Friday 7/30/21 A nervous market after FOMC and FAANG earnings The Fed seemed to have stirred up anxiety in the market this week. Additionally, there was pre-earnings gamma squeeze of FAANG stocks (FB, AAPL, AMZN, MSFT, GOOG), which drove their prices up substantially. Then the unwinding of the gamma squeeze resulted in sharp sell-offs after their earnings announcements. But there is no crash signal on the horizon right now. There is a lot anxiety however, and as $VIX $VXN $RVX charts show below, the most likely way for the market to get rid of anxiety is to have a mini-selling event. Just enough of a dip to bring in dip buyers, enabling $SPX $NDX IWM to launch the next Big Bull Up Swing. $VIX $VXN $RVX $VIX $VXN $RVX charts below show that they are not quite done spiking yet. But they are also unlikely to surge super high. Just enough of a spike to result in a corresponding biggish dip for $SPX $NDX IWM. And that is the setup that we think will launch the next Big Bull Up Swing. Table of Support & Resistance Zones The S/R table is partially updated. Signal Trades Based on overnight futures actions (ES NQ RTY), we think $SPX $NDX IWM are going to gap down at open, and are likely to march down a bit more, until they reach their green support zones. As discussed yesterday, we plan to enter TQQQ and TNA in their green support zones, which should be reached when $VXN spikes. These trades are designed to capture the Big Bull Up Swing. We expect to hold these positions for multiple days. Yesterday in the spreadsheet, we posted a trade setup for FNGD, to enter at 2.43 and hold until 2.7. Well, FNGD reached a morning low of 2.44 and an after-hour high of 2.61, due to AMZN earnings miss. Sure wish we had time for that trade. We hope some of you did. There is no setup for a quick trade right now as Friday is likely to be a day of lots of reversals. We will keep you posted. Click here for Signal Trades spreadsheet. To Read We urge you to read this article about risk management and position sizing. 1% Risk Rule If you are new to trading 3x leveraged ETFs like TQQQ TNA SOXL FNGU, read: Why 3x ETFs like TQQQ lose money over the long term If you are new to trading inverse ETFs like SQQQ TZA SOXS FNGD, read: The risks of investing in inverse ETFs 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 suggestions.
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Click here for Signal Trades spreadsheet. Updates 2:30 AM EST - Thursday 7/29/21 Fed inching towards tapering At FOMC announcement on Wednesday, the Fed dropped hints that they may start to taper bond purchases later this year, including both mortgage and Treasury bonds. The Fed said "the economy has made progress toward these goals" (of low employment and stable inflation). This statement is part of the Fed's priming process to begin tilting market's thinking in the direction of tapering. This is actually the second step that the Fed has taken towards reducing the easy money supply. The Federal Reserve Bank of NY had already started gradual sales of its corporate bond holdings on 7/12. There are technically 4 more Fed meetings scheduled, including the upcoming Jackson Hole summit 8/26 - 8/28. WSJ speculated that the Fed could start tapering bond purchases by end of this year. But no rate raise yet Powell said that the Fed was nowhere near considering plans to raise interest rates: “It’s not something that is on our radar screen right now.” Inflation Interestingly, Powell made this comment about inflation: "There’s absolutely no sense of panic. My best estimate is that this is something that will pass…But we’re actually responsible for this, though, so we have to take seriously the risk case, which is that inflation will be more persistent.” It seems to us that this is a hint that they may step on the brake sooner and harder than the market might be expecting. Inflation is becoming a real concern. Even IMF warns about it, saying it may be persistent and central banks may need to act soon. WSJ editorial wrote a lengthy piece about the Fed's big inflation miss. $VIX $VXN $RVX Yesterday, we wrote: $VIX $VXN $RVX may not spike right away after FOMC announcement. In fact they may drop down and anchor near their 200-hr EMA green line. If this is the case, we will wait, as that is usually a setup for volatility to spike again. That did turn out to be the case for Wednesday. $VIX $VXN $RVX charts are still telling us that they are likely to spike at least one more time. See explanations on charts below. Table of Support & Resistance Zones The S/R table is partially updated. Signal Trades Some members were wondering why our target buy orders are so low. It is because we do expect $SPX $NDX IWM etc to retest the green support zones, as $VIX $VXN $RVX spike up one more time. Note that we have raised the green zones a bit based on Wednesday price data. The orange zones are short-term resistance, but we think that once $SPX $NDX anchors at support in the green zones, they will eventually surpass the orange resistance zones. Not sure about IWM yet. We recommend monitoring for the formations of $VIX $VXN $RVX spike tops. If you see them show up, it's a low-risk setup to scale in long. We plan to enter TQQQ and TNA at these top formations, which currently translate to the buy orders we posted. Note that these are trades to capture the Big Bull Up Swing which should kick off on Thursday. We expect to hold these positions for multiple days. Finally, due to the constraints in our current personal schedule, we can't monitor the market constantly intraday in order to do quick trades. But we have added a section called "Ideas for Quick Trades" in the spreadsheet. For Thursday, FNGD is a setup worth a look. FB, AAPL, GOOG, MSFT all announced earnings 7/28. They all beat spectacularly, and they are all down, in a top formation. FNGU is now in a top formation. This creates a low-risk setup to do a quick FNGD trade. Be careful trading FNGD though because it is only $2.48/share right now. A move of one penny can make a big difference for this price level. Click here for Signal Trades spreadsheet. To Read We urge you to read this article about risk management and position sizing. 1% Risk Rule If you are new to trading 3x leveraged ETFs like TQQQ TNA SOXL FNGU, read: Why 3x ETFs like TQQQ lose money over the long term If you are new to trading inverse ETFs like SQQQ TZA SOXS FNGD, read: The risks of investing in inverse ETFs 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 suggestions. Click here for Signal Trades spreadsheet. Updates 1:00 AM EST - Wednesday 7/28/21 $VIX $VXN $RVX The spike in volatility on Tuesday is the first volley, but we actually don't think $VIX $VXN $RVX will spike up much more after FOMC announcement at 2 PM on Wednesday. On their hourly charts below, we've marked about how high we project $VIX $VXN $RVX will spike again, before topping out in the short-term. Here's the thing. $VIX $VXN $RVX may not spike right away after FOMC announcement. In fact they may drop down and anchor near their 200-hr EMA green line. If this is the case, we will wait, as that is usually a setup for volatility to spike again. Table of Support & Resistance Zones The S/R table is fully updated. s Signal Trades The green zones above are our projections for where prices will likely find support when $VIX $VXN $RVX spike up post FOMC. But of course there is no guarantee. The orange zones are short-term resistance, but we think that once price anchors at support, they will climb higher than these levels. We recommend monitoring for the formations of $VIX $VXN $RVX spike tops. If you see them show up, it's a low-risk setup to scale in long. We plan to enter TQQQ and TNA at these top formations. Click here for Signal Trades spreadsheet. To Read We urge you to read this article about risk management and position sizing. 1% Risk Rule If you are new to trading 3x leveraged ETFs like TQQQ TNA SOXL FNGU, read: Why 3x ETFs like TQQQ lose money over the long term If you are new to trading inverse ETFs like SQQQ TZA SOXS FNGD, read: The risks of investing in inverse ETFs 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 suggestions. Click here for Signal Trades spreadsheet. Updates 1:00 AM EST - Tuesday 7/27/21 Bearish divergence persists We discussed yesterday about how market internals are diverging bearishly under the hood. Additionally, RSI readings on hourly and daily charts are diverging bearishly from $SPX $NDX prices. On a fundamental level, we now have negative total real yield from stocks for the first time since 1946. That is earning and dividend yield minus inflation. According to Nasdaq website: This has usually spelled trouble historically. Going back to 1970, there has only been one instance when the market did not decline at least 32% in the two years following the point at which yields went negative. We need to keep this in mind in the context of the bigger picture. But, we also have to trade what's actually happening. And right now, it's a market of greedy brazen bulls and desperate frustrated bears. $VIX $VXN $RVX: One more quickie lower high spike Based on the latest chart patterns, $VIX $VXN $RVX are still likely to spike up a bit after FOMC on 7/28. But "a bit" is the operative word here. Below $VIX $VXN $RVX charts show about how high to expect the spike to be, and what most likely will happen in August. Table of Support & Resistance Zones $SPX SPY have been updated. All else remains the same. $SPX $NDX IWM We want to clarify that there is no crash signals showing up on the horizon right now. All we are projecting based on our analysis is for $SPX $NDX IWM to have a dip post FOMC, and then resume their climbs upward. Our goal is to go long, entering TQQQ TNA at the dip and capture as much of the next Big Bull Up Swing as possible. Keep in mind though the setup described above may not show up. $SPX $NDX may ignore all bearish divergence signals and messages and just keep marching up. If that is the case, we may have to resort to trading Quick Bull rather than Big Bull positions. Signal Trades We are going to trade very lightly, if at all, pre-FOMC. We want to focus our mental energy and cool off our cash to be ready for to buy the dip post FOMC. Click here for Signal Trades spreadsheet. To Read We urge you to read this article about risk management and position sizing. 1% Risk Rule If you are new to trading 3x leveraged ETFs like TQQQ TNA SOXL FNGU, read: Why 3x ETFs like TQQQ lose money over the long term If you are new to trading inverse ETFs like SQQQ TZA SOXS FNGD, read: The risks of investing in inverse ETFs 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 suggestions Click here for Signal Trades spreadsheet. Updates 12:30 AM EST - Monday 7/26/21 Big week coming up The economic calendar for this coming week is full of important events. Mon: New Home Sales Tue: Durable Goods Orders; Case-Shiller Home Price Index Wed: FOMC announcement (2 PM EST) Thu: GDP; Jobless Claims Fri: Employment Cost Index; Personal Income & Outlays The various reports will bring forth data and discussions on two key issues:
Into this mix is the other central question: Will the Delta variant derail the economy by causing shutdown? Earnings: Hotter than July Only 25% of S&P companies have reported so far, but the data has been very impressive: "Overall earnings are now expected to grow 76% year over year for the period, the best growth since 2009." - CNBC However, market participants know that 20201 2nd quarter (Q2) is a historic quarter, and is likely to be peak earnings growth for this year. Still, analysts are projecting 27% rise for 3rd quarter, and 20% rise for 4th quarter (compared to a year earlier). Profit margins have been very impressive so far: 13% for Q1, 12.8% for Q2. But Delta chill is looming Ah yes, that pesky Delta variant. In late August, students will start to head back to school. More activities will move indoor when the cold weather arrives. That's the typical setup for flu season to start, and it will be the setup for the Delta variant to spread even more. However, market participants are not expecting the government to shut down everything like March 2020. Instead, they expect the government to keep pushing vaccination as the key to keeping COVID under control in the long term. What started out as a pandemic will most likely become endemic as time goes on. Inflation, yields and the Fed June’s inflation index jumped 5.4% from a year ago, the highest reading since August 2008. There are certainly many economists who feel that inflation going to get out of control with the Fed too-easy monetary policy. But the bond market so far is disputing that theory. Since mid-March, US10Y and US30Y have both been dropping. They may spike back up a bit, but investors are still piling into bonds with the belief that inflation likely isn’t the biggest problem facing the U.S. and global economy. Instead they are worried that growth will slow again. Interestingly enough, according to WSJ: "One possible consequence of the bond rally is that lower Treasury yields, all else being equal, can help lift stock prices by lowering borrowing costs for businesses and pushing investors to buy riskier assets in search of better returns." In the short term, we think that the economics effect of the Delta variant is still a big enough concern. This will most likely keep the Fed from raising rates, or aggressively tightening the easy money supply any time soon. Market internals: still diverging bearishly Despite the fact that equity has seen record inflow in the first half of 2021, market internals continue to trend bearish. NYSE A/D: Since early June, NYSE cumulative A/D chart have been forming triple top pattern, diverging bearishly with $SPX. This pattern has improved a bit last week. Nasdaq A/D: Since early February, Nasdaq cumulative A/D chart have been forming massive multi-top and lower high pattern, diverging bearishly with $NDX. This pattern has improved a bit last week. Percentage of NYSE stocks above 50 MA: Only 40% on the weekly chart, a huge drop from 85% at the start of the year. Percentage of Nasdaq stocks above 50 MA: 73% on the weekly chart, a big drop from 95% at the start of the year. $VIX $VXN $RVX: One more quickie lower high spike $VIX $VXN $RVX are all likely to spike up a bit after FOMC on 7/28. We showed on their charts below about how high to expect the spike to be, and what most likely will happen in August. Table of Support & Resistance Zones The S/R table has been fully updated. $SPX $NDX IWM While $VIX $VXN $RVX retest the highs of 7/19, $SPX $NDX IWM are going to have another biggish dip. They are very likely going to retest the updated green support zones, anchoring in there to bring in new buyers and launch into a new Big Bull Up Swing. Signal Trades We are going to trade very lightly, if at all, pre-FOMC. We want to focus our mental energy and cool off our cash to be ready for FOMC positioning. Click here for Signal Trades spreadsheet. To Read We urge you to read this article about risk management and position sizing. 1% Risk Rule If you are new to trading 3x leveraged ETFs like TQQQ TNA SOXL FNGU, read: Why 3x ETFs like TQQQ lose money over the long term If you are new to trading inverse ETFs like SQQQ TZA SOXS FNGD, read: The risks of investing in inverse ETFs 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 suggestions Click here for Signal Trades spreadsheet. Updates 1:00 AM EST - Friday 7/23/21 Table of Support & Resistance Zones The S/R table is still the same. Key dates and levels We are monitoring for the following likely key dates and volatility levels.
We are monitoring for the following likely sequence of events.
Bullish confirmation Below is $VVIX chart showing the bullish sequence to look for. If you see this, and it is accompanied by $SPX $NDX IWM forming same low or higher low (relative to 7/19), it's a very very bullish setup to enter long. This setup is most likely the start of the next Big Bull Up Swing that can take us to new all-time highs. Bearish alert And below is UVXY chart showing the bearish sequence to also monitor for. If this sequence shows up, then a highly bearish scenario for $SPX $NDX IWM may be unfolding. Signal Trades
We will be out of the office on Friday, so there won't be any intraday trades. If you do trade, tread lightly and avoid holding short-term positions over the weekend. Click here for Signal Trades spreadsheet. To Read We urge you to read this article about risk management and position sizing. 1% Risk Rule If you are new to trading 3x leveraged ETFs like TQQQ TNA SOXL FNGU, read: Why 3x ETFs like TQQQ lose money over the long term If you are new to trading inverse ETFs like SQQQ TZA SOXS FNGD, read: The risks of investing in inverse ETFs 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 suggestions. Click here for Signal Trades spreadsheet. Updates 1:30 AM EST - Thursday 7/22/21 $VIX $VXN $RVX The highs reached by $VIX $VXN $RVX on 7/19, and the lows reached on 7/2 will most likely be the boundaries for $VIX $VXN $RVX for a while. We are looking for the following key dates and key volatility levels.
Table of Support & Resistance Zones The orange resistance zones have been updated. $SPX $NDX IWM While $VIX $VXN $RVX swing up and down, $SPX $NDX IWM will swing up and down as well, but in the opposite direction. We are looking for the following likely sequence of events.
These dates are based on the data we have right now. But we may very well be off with the dates. The best strategy, recommended to you and to ourselves, is to monitor for $SPX $NDX IWM retest of 7/19 lows. If you see this, and it is accompanied by $VIX $VXN $RVX making same high or lower high, it's a very very bullish setup to enter long. This setup is most likely the start of the next Big Bull Up Swing that can take us to new all-time highs. Click here for Signal Trades spreadsheet. To Read We urge you to read this article about risk management and position sizing. 1% Risk Rule If you are new to trading 3x leveraged ETFs like TQQQ TNA SOXL FNGU, read: Why 3x ETFs like TQQQ lose money over the long term If you are new to trading inverse ETFs like SQQQ TZA SOXS FNGD, read: The risks of investing in inverse ETFs 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 suggestions. Click here for Signal Trades spreadsheet. Updates 2:00 AM EST - Wednesday 7/21/21 $VIX $VXN $RVX The projections we posted for $VIX on Monday is unfolding along pretty well so far. Here are the projections for all three charts $VIX $VXN $RVX. The red arrows are previous FOMC dates since January. Notice how $VIX $VXN $RVX rose up for at least a couple days after the announcement each time. They are likely to do the same on 7/28. So we are looking for the following likely sequence of events.
Table of Support & Resistance Zones The orange resistance zones have been updated. $SPX $NDX IWM We are looking for the following likely sequence of events.
Signal Trades Click here for Signal Trades spreadsheet. To Read We urge you to read this article about risk management and position sizing. 1% Risk Rule If you are new to trading 3x leveraged ETFs like TQQQ TNA SOXL FNGU, read: Why 3x ETFs like TQQQ lose money over the long term If you are new to trading inverse ETFs like SQQQ TZA SOXS FNGD, read: The risks of investing in inverse ETFs 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 suggestions. Click here for Signal Trades spreadsheet. Updates 1:30 AM EST - Tuesday 7/20/21 The clues are in UVXY chart We've been showing you how to track $VIX $VXN $RVX charts to determine when volatility is likely to rise. As you can see it's a pretty reliable technique. Now that $VIX $VXN $RVX have spiked, how do we determine when they have topped out? The clues are actually more easily discerned in UVXY chart. Take a look at UVXY chart from 2019 into 2020. When UVXY spent a bunch of time above its 50-day EMA red line, forming multiple tops, it was actually very bullish setup for $SPX to rise higher. But when UVXY bottomed out, spiked up quickly, then drop right back to form a same-low bottom, that's highly bearish. That was the setup right before the crash for 2020. We must confess we are now a little nervous with the current UVXY daily chart as shown below. If UVXY drops down quickly to form the multi-bottom pattern similar to February 2020, then $SPX may be headed for much more major pullback. Having said that, we urge you to approach this pattern carefully. It's going to take time for UVXY to reveal where it's going. A/D Net Issues are terrible Of all the market internal charts, Nasdaq A/D chart looks pretty bad. As you can see below, the current Nasdaq A/D pattern looks similar to the pattern back in late February 2020 at the start of the crash. We've got to keep this in mind even if $NDX recovers. Table of Support & Resistance Zones The S/R table has been fully updated. $SPX $NDX IWM We have lowered the orange resistance zones to reflect the first level of resistance. Some observations:
Signal Trades We will post trade positions based on actions pre-market. Click here for Signal Trades spreadsheet. To Read We urge you to read this article about risk management and position sizing. 1% Risk Rule If you are new to trading 3x leveraged ETFs like TQQQ TNA SOXL FNGU, read: Why 3x ETFs like TQQQ lose money over the long term If you are new to trading inverse ETFs like SQQQ TZA SOXS FNGD, read: The risks of investing in inverse ETFs 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 suggestions. Click here for Signal Trades spreadsheet. Updates 1:47 PM EST - Monday 7/19/21 Not a crash In the 2:30 AM post, we alerted you that $VIX is going to spike up between today and Wednesday. We didn't think it would surpass 21, but it got up to a high of almost 25 this morning. So is the market crashing? The answer is "No" based on the formation of $VIX chart pattern. Take a look at our explanations for that below. At this point, we are projecting the following movements.
Updates 2:30 AM EST - Monday 7/19/21 Key events coming up: earnings and the Fed The economic calendar for this coming week is light. Market participants will be closely monitoring earnings and positioning themselves ahead of FOMC announcement on 7/28. Earnings: very strong On the earnings calendar for this week are big-name stalwarts such as Johnsons & Johnson, Coca-Cola, Verizon, Intel, AT&T, American Express, Honeywell, as well as Netflix. So far earnings season is going very strong. 38 companies that have reported. Of these, 87% are beating earnings estimates by a median of 13%. The projection for S&P stocks is that their earnings will be up more than 66% for this quarter. Chill, baby, chill Some analysts are projecting that this may be a peak earnings quarter for this year. Most economists also agree that the growth surge in the US economy has peaked this past spring. They are still expecting growth, but at a slower rate. According to Morgan Stanley: “We’re past the peak for growth, but that doesn’t mean something more sinister is going on here and that we’re poised to then drop off sharply.” So what we have in terms of economic fundamentals is a pretty strong growth foundation. The fact that growth is expected to moderate a bit is a good thing in the long run. The Worry List: Delta variant, inflation Against this backdrop, we have two looming fears. The Delta variant is spreading quickly, but it seems so far to primarily affect the un-vaccinated population. So the thinking on Wall Street is that instead of a total shutdown, the government will continue to push vaccination as the key in fighting COVID. As we approach the fall and then winter though, we may see more bans in large crowd gatherings. Even indoor dining remains iffy. Both of these will have big effects on the earnings of certain companies. The other huge worry is of course inflation. Powell testified in Congress last week and continued to maintain that inflation is transitory for now. He also assured Congress that the Fed is not planning to taper any time soon. The Fed also released the Beige Book last week. This data is more telling in this report. Most business surveyed expect prices for raw materials to rise in the coming months and feel therefore they have to hike selling prices as well. They are also greatly concerned about finding workers. Rising wages will also lead to rising prices in selling goods and services. "Risk-on" is on but... Equity investors are still strongly in the "risk-on" mode. According to Financial Times, in the first half of 2021, inflows into global equity funds are the largest on record. And according to Bloomberg, ETF inflows are set to smash record in 2021. One could argue that the dumb herd is going to fall off the cliff at this rate, but so far the herd is winning. One thing to keep watching is bond yield. US10Y and US30Y resumed the down trend again. This means that bond prices resumed their up trend. So why are investors piling into Treasury bonds (TLT, IEF), especially the 20y+ ones, when they could be in equities, or if they are worried about inflation? This is where the deflation argument comes back. But for now, no one has the definitive answers. Market internals continue to weaken Despite the fact that equity has seen record inflow in the first half of 2021, market internals continue to trend bearish. NYSE A/D: Since early June, NYSE cumulative A/D chart have been forming triple top pattern, diverging bearishly with $SPX. This pattern dropped sharply last week. Nasdaq A/D: Since early February, Nasdaq cumulative A/D chart have been forming massive multi-top and lower high pattern, diverging bearishly with $NDX. This pattern dropped sharply last week. Percentage of NYSE stocks above 50 MA: Only 35% on the weekly chart, a huge drop from 85% at the start of the year. Percentage of Nasdaq stocks above 50 MA: 69% on the weekly chart, a big drop from 95% at the start of the year. $VIX $VXN $RVX: short-term peak coming up then... Wednesday 7/21 is the expiration date for standard $VIX options. Between now and then, we may see $VIX $VXN $RVX take a small dip, then spike up some more, before peaking around 7/21. After this short-term top forms, $VIX $VXN $RVX will most likely drop to anchor again near their 7/13 low. This will most likely happen right before FOMC. What will happen after FOMC is not something we can project yet, but our hunch is $VIX $VXN $RVX will spike again, this time up to the green lines marked on their charts below. After the 2nd bigger volatility spike, we may see $SPX $NDX IWM drop down low enough to bring in more dip buyers to eventually break out above their orange resistance zones. Table of Support & Resistance Zones The S/R table has been mostly updated. $SPX $NDX IWM You may notice that we've moved the green support zones up. These zones are likely to be short-term support for this week, before we get to FOMC next week. While $VIX $VXN $RVX spike possibly Monday and Tuesday, $SPX $NDX IWM are likely to drop down and anchor in their green support zones. Then we may see dip buyers step in to help $SPX $NDX IWM bounce back up. $SPX $NDX IWM will most likely try to get up close to their orange resistance zones. But there is a low probability that $SPX $NDX IWM can surpass the orange resistance zones before FOMC on 7/28. There is a high probability that $SPX $NDX IWM will form same-high or lower-high patterns near their orange resistance zones, before dropping some more after FOMC. Signal Trades We will not be doing intraday trade on Monday as we have to be out of the office. If you do trade, keep in mind that conditions will remain choppy. So buy the intraday dip, and TMAR quickly. A small profit is better than none. (Note to self: follow your own advice.) Click here for Signal Trades spreadsheet. To Read We urge you to read this article about risk management and position sizing. 1% Risk Rule If you are new to trading 3x leveraged ETFs like TQQQ TNA SOXL FNGU, read: Why 3x ETFs like TQQQ lose money over the long term If you are new to trading inverse ETFs like SQQQ TZA SOXS FNGD, read: The risks of investing in inverse ETFs 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 suggestions. |
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