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Rangebreakout

Is Volatility the New Normal? Hi I'm Goose and I'm apparently obsessed with the VIX this week. I would say I've reached a point of borderline stalker, going through historical data, working up average all time range theories, and ultimately writing a script that will give me a bar count inside and outside of a date and price range and the percentage of time during that period that the VIX has gone wild. I used this script compare these statistics across the daily chart in different sections of time. Now, I did this because I am anticipating a return to mean with the VIX any moment now. I'm tapping my fingers and getting impatient. And not because I'm waiting for a rally, I mean, a rally would be cool, but because this has gone on long enough really. So I decided to compare the 2008 Crash historical data with the more recent Covid data. If you haven't read the in's and out's, the timeline and the reasons why, go do that right now. Or just watch The Big Short a couple of times for the cliff notes. But for the sake of this chart, I marked up some of the important moments during what is now known as the Housing Crisis/Great Recession. Theoretically I could have made arguments to drag this period out to 2014, but comparably it makes little sense and frankly, even further drives my theory, so I ended the period when the market had recovered its 50% losses from pre crash peaks. Keep in mind, current markets recovered and S&P Futures made a new high in just under 6 months from the Covid Crash. So this is already an unfair comparison. And that is kind of my point. Comparable factors like unemployment and U.S. Homeownership are actually contradictory for the most part if you omit the summer of 2020. And if you're in the group, as I am, that believes low unemployment numbers promote higher inflation numbers, then we could argue inflation begun, albeit transitory, in May and July of 2018 when unemployment dropped below 4% and really got a foothold in 2019. All it needed was a supply chain interruption. And I know Covid takes the blame for that, but that had started also. China trade, pine beetles, metal shortages, coffee , etc... So when Covid whooped the employment numbers 10 points from March at 4.4%, to April at 14.7%, it basically created a sling shot effect with equities. Come August of 2020 when those numbers rapidly dropped to 8.4% we made brand new highs. And within a year we had dropped back to where we started in the upper 4% range. I know I'm on a tangent, but why is this important? Because in the Covid Market, we turned those numbers around in 1 year, as opposed to the 5 years it took to recover AFTER the end of the Recession and its 5 year recovery. Soooo... That's why I'm not counting that period, and why I'm calling out VIX on is behavior. So lets get to my point. Is the new normal volatile AF ? As it currently stands, and based on a range of $10-$20 dollars which I determined to be fair visually for the initial part of this work up, the VIX has spent 5% more days above the standard range. Now 5% isn't a deal breaker. We can find dramatic headlines that will excuse random volatility but I will argue we are at a crossroads. If we continue to stay above $20, we risk having to work hard and longer to get that figure back down. Remember calculating your GPA , but in reverse. Eventually the shock and awe of a +$30 VIX won't induce the same FOMO reaction and things may get really weird. When VIX goes into the new year, the powers that be will need to reign her in to avoid decoupling on any given Wednesday instead of just low liquidity holidays. My theory actually goes further down the rabbit hole when I narrowed down a true 50% average range, wait for it.... $10 - $16.75! YES! The overall, from inception, average high of range sits at $16.75. And pop on the tin foil hat because with that range, both the Housing Crisis/Great Recession AND the Covid Market are sitting at 91% above range. I checked that 3 times to be sure and I did not include that in the frame of this chart as it already had enough scribbling all over it, but if you explore to the bottom of the chart you will see a smashed up mess of it. So if your listening Market Makers, shut it down, shut it down now. And if that is what you are setting up to do as I have already speculated in a previous work up, well done! Keep it up. I know for a fact that the VIX is heavily relied upon by many successful traders in many different products for directional bias, let's not ruin it shall we... On this chart you will see the table bar counts for inside and outside of price range for the specified period as well as the total bar count and the percentage of bars outside of that range. That means up OR down so the period between the Recession and Covid has 12% outside of range, but you will notice that it goes below the range as well. When the price range was moved down beneath the lows to $8, it lowered the percentage by 3 points. I have also labeled some fun facts that occurred during the historical period to show a bit about why I choose the dates that I did. Leave a comment for a heated debate, or to tell me how cool I am, or that I'm just a silly Goose. en.wikipedia.org www.statista.com data.bls.gov
TVC:VIX
by goofoffgoose
EURGBP - potential setupsFX_IDC:EURGBP Hello everyone! 🛎 Let check the trading idea for EURGBP 🤗 Not making anything difficult everything is pretty straightforward. 👉 1. Price goes ABOVE the selected range on the picture. Long positions to activate. 🟢 👉 2. Price goes BELOW the selected range. Short positions to activate. 🔴 ---------------------------------------------------------------------------------------------------------------------------- ⚠️ Important Notes: 1. Always follow your trading plan regarding entry, risk management, and trade management. ❗️❗️❗️ 2. Timeframes: up to H4 ---------------------------------------------------------------------------------------------------------------------------- 😉 If you like the idea there was a like 🚀 and sign up so you can continue receiving great ideas like this one and also for us to make pattern the idea! 🤝 💪 Profitable lock for everyone! 🙏
by Solidity_best_options
1
XAUUSD - potential setupsFX_IDC:XAUUSD Hello everyone! 🛎 Let check the trading idea for XAGUSD 🤗 Not making anything difficult everything is pretty straightforward. 👉 1. Price goes ABOVE the selected range on the picture. Long positions to activate. 🟢 👉 2. Price goes BELOW the selected range. below. Short positions to activate. 🔴 ---------------------------------------------------------------------------------------------------------------------------- ⚠️ Important Notes: 1. Always follow your trading plan regarding entry, risk management, and trade management. ❗️❗️❗️ 2. Timeframes: up to H4 ---------------------------------------------------------------------------------------------------------------------------- 😉 If you like the idea there was a like 🚀 and sign up so you can continue receiving great ideas like this one and also for us to make pattern the idea! 🤝 💪 Profitable lock for everyone! 🙏
FX_IDC:XAUUSD
by Solidity_best_options
4
AUDJPY - potential setupsFX_IDC:AUDJPY Hello everyone! 🛎 Let check the trading idea for AUDJPY 🤗 Not making anything difficult everything is pretty straightforward. 👉 1. Price goes ABOVE the selected range on the picture. Long positions to activate. 🟢 👉 2. Price goes BELOW the selected range. below. Short positions to activate. 🔴 ---------------------------------------------------------------------------------------------------------------------------- ⚠️ Important Notes: 1. Always follow your trading plan regarding entry, risk management, and trade management. ❗️❗️❗️ 2. Timeframes: up to H4 ---------------------------------------------------------------------------------------------------------------------------- 😉 If you like the idea there was a like 🚀 and sign up so you can continue receiving great ideas like this one and also for us to make pattern the idea! 🤝 💪 Profitable lock for everyone! 🙏
by Solidity_best_options
1
Gold Futures - potential setupsCOMEX:GC1! Hello everyone! 🛎 Let check the trading idea for Gold Futures 🤗 Not making anything difficult everything is pretty straightforward. 👉 1. Price goes ABOVE the selected range on the picture. Long positions to activate. 🟢 👉 2. Price goes BELOW the selected range. below. Short positions to activate. 🔴 ---------------------------------------------------------------------------------------------------------------------------- ⚠️ Important Notes: 1. Always follow your trading plan regarding entry, risk management, and trade management. ❗️❗️❗️ 2. Timeframes: up to H4 ---------------------------------------------------------------------------------------------------------------------------- 😉 If you like the idea there was a like 🚀 and sign up so you can continue receiving great ideas like this one and also for us to make pattern the idea! 🤝 💪 Profitable lock for everyone! 🙏
COMEX:GC1!
by Solidity_best_options
1
Dollar Mid Year Macro UpdateIn January I reviewed the long-term technical and fundamental positions of the big four: Bonds, Equities, Commodities, and the Dollar. Those pieces are extensive in terms of both fundamental and technical outlooks and are linked below. January 2022 Observations: Bottom Line: It’s a range trade until it ain't no more. Impetus for a range break could be provided by the Federal Reserve increasing rates significantly faster/slower than current expectations or faster/slower than other central banks. Externally, a flight to safety resulting from disruption in emerging markets, armed conflict in Europe, or significant new domestic fiscal stimulus are all possibilities. When thinking about the Dollar its worth remembering that currency is a relative game. It's not only the domestic economy and monetary/fiscal policy, but those factors relative to the same factors inside our largest trading partners. -The 88.25 - 103.82 range is the most important chart feature. Moves inside the bounds of the range are noise, and while they may represent trading opportunities mean little in macro terms. Where is the market now? Since January, flight to quality, an ultra-aggressive Fed tightening cycle, conflict in the Ukraine and EM turmoil have all combined to produce a roughly 14% rally. In May, price thrust above the resistance along the top of the 102-104 zone. Over the last few weeks, the market narrative changed and profit taking ensued, resulting in the market moving back toward the breakout zone. The decline built a bull flag (easily seen on the daily perspective chart). Now the recent thrust higher suggests that the correction may be complete. -DXY has finally moved modestly above the top of the range that has contained price since 2014. -The breakout needed to be confirmed by a completed test of the broken range top but last week’s thrust higher strongly suggests a successful test. -Monthly MACD remains on a bullish trend signal. -Volatility (VOL) MAY finally be turning higher, but has yet to move above the downtrend that defined its trend since 2003. How far might a breakout carry? -The overbought line of the parallel trend channel that has defined the advance since 2011 intersects price in the 113-114 zone. -Horizontal resistance in the 121 zone is extremely strong and is nearly 12% higher, -Measured move targets generated by the length of the range and the Point and Figure counts suggest potential targets in the 118-120 zone. -Above 120-121, the 1985 165 resistance comes into play. A Note on Tactics: I have a preference toward systemizing discretionary behaviors. My approach to trading breakouts generally falls into this category. After a breakout (In any perspective) there are generally three main behaviors that I monitor for (and many variations on the themes) and three general trading reactions to those specific behaivors. I like to build trading plans around those three behaviors. Behavior 1: The market thrusts, closes above resistance and rallies without setting back to test the breakout zone (This appears to be what is unfolding now). This behavior is the most bullish of the three. Plan: Buy bullish thrusts from bull flags and corrective patterns in the lower perspective time frames. Behavior 2: The market sets back to the top of the broken range, preferably in a corrective manner and then rallies. Plan: Buy thrust out of the lower time perspective pattern that develops on a decline to test the breakout. Behavior 3) The market fails and falls back into the range. Plan: Sell breaks of the bear flags that develop as the market breaks lower. Failed breakouts often produce significant reversals. Sometimes the behaivors are muddled and no clear pattern develops. If that occurs, no worries… find another market to trade. Triple Screen: A bit of a mess in that the weekly momentum is so overbought, but often when a market breaks out from a long-term range overbought momentum is actually a sign of strength. Importantly, the trend in price is ALWAYS more important than the state of momentum. Monthly: Price is clearly trending higher. MACD is on a long term buy signal and trending higher. The momentum in this perspective is higher both in terms of momentum and price. Weekly: Price trend is clearly higher and momentum is overbought and is attempting to turn lower. With monthly momentum higher, pullbacks in this perspective can be used to enter monthly perspective/macro positions. Daily: The short term overbought has been relieved. The pullback from the high has been entirely consistent with corrective behavior. Fundamentally: If you believe that DXY will turn lower, you must simultaneously believe that the Euro is ready to turn higher as it has an almost 60% weight in the index. I suspect, given Europe's challenges, that a wave of fiscal stimulus to offset the winter energy shock will serve to further weaken the currency. Less farfetched is the idea that JY (14% weight) might strengthen somewhat. But it’s much smaller weight will produce far less DXY gravity than the Euro. The same change of narrative that produced the rally in risk assets has pressured DXY. Markets seem to believe that the easing of inflaiton (a slower rate of change) means that the Fed is nearing the end of its tightening campaign and, perhaps will begin cutting rates in reaction to a slowing economy. But the easing of financial conditions created by the rallies in risk assets and still strong employment gives the Fed plenty of room to continue increasing rates. I think they have been abundantly clear that they are determined to bring inflaiton under control, even in the face of a much weaker economy. In my mind, Powell needs to decide if his legacy is Arthur Burns or Paul Volker. My guess is he chooses Volker. Volker = stronger DXY. Fiscal impulse in the US should remain negative. The prospect of a split congress significantly decreases the likelihood of substantive new spending bills. In relative terms the US Fed remains one of the most aggressive tighteners on the planet. The combination of rate increases and quantitative tightening create a powerful bullish relative mix for DXY. Many analysts suggest that weakness in DXY has created a rally in risk assets. I believe they have causation backwards. During periods when global risk assets struggle, weakness in risk assets and flight to quality creates flows into DXY. When risk assets do better, as they have over the last few weeks, the DXY weakens as flows reverse to risk. If/when risk assets begin to decline again, flows will again become DXY favorable. Conclusion: -The market appears to be breaking out of the broad range that has contained price since 2014. -Monthly price and momentum trends are clearly higher. -VOL has yet to break above its long-term downtrend but I suspect that is coming soon. A break above the downtrend would imply a long cycle of higher price. - I have built my second half trading plan around the three behaviors covered above, but I have a strong preference for bullish entries. -Without a Fed pivot, which I view as highly unlikely, fundamentals continue to strongly favor DXY strength. -Fresh weakness in risk assets will buttress the bullish thesis. Finally, in my opinion, succesfull trading requires strong opinions that are loosely held. I wake up each day questioning my positioning and thesis, because… things change. Good Trading: Stewart Taylor, CMT Chartered Market Technician Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
TVC:DXY
by CMT_Association
24
Is $DE ready to move higher from here?Notes: * Very strong up trend * Great earnings track record * Was basing for about a year before volatility kicked it around to both the up and down side of the base * It's currently back within that base (between 394.4 and 323.5) * Last weeks close had strong volume coming in (above average) * Recently came back above the $357.1 mark on the weekly, which seems to be a battle ground for bull and bears (with higher than average volume) * Was consolidating tightly all of last week with increasing volume and broke out of that consolidation on Friday with abnormally high volume * Currently offering an early entry and a pocket pivot Technicals: Sector: Industrials - Farm & Heavy Construction Machinery Relative Strength vs. Sector: 1.02 Relative Strength vs. SP500: 1.18 U/D Ratio: 1.2 Base Depth: 53.52% Distance from breakout buy point: -16.72% Volume 208.01% above its 15 day avg. Trade Idea: * You can enter now as the price is just breaking out of consolidation with higher than average volume * If you want a better entry you may be able to get one around the 361.9 area if it comes back within the consolidation range * This stock usually has local tops when the price closes around 13.34% above its 50 EMA * Consider selling into strength if the price closes 13.14% to 13.54% (or higher) above its 50 EMA * The last closing price is 8.67% away from its 50 EMA
NYSE:DELong
by HaseebKhan_90
ETHUSD - Potential ideaBINANCE:ETHUSD Hello everyone! 🛎 Let check the trading idea for ETHUSD 🤗 Not making anything difficult everything is pretty straightforward. 👉 1. Price goes ABOVE the selected range on the picture. Long positions to activate. 🟢 👉 2. Price goes BELOW the selected range. below. Short positions to activate. 🔴 ---------------------------------------------------------------------------------------------------------------------------- ⚠️ Important Notes: 1. Always follow your trading plan regarding entry, risk management, and trade management. ❗️❗️❗️ 2. Timeframes: up to H1 ---------------------------------------------------------------------------------------------------------------------------- 😉 If you like the idea there was a like 🚀 and sign up so you can continue receiving great ideas like this one and also for us to make pattern the idea! 🤝 💪 Profitable lock for everyone! 🙏
BINANCE:ETHUSD
by Solidity_best_options
4
GBPUSD - potential setupsFX_IDC:GBPUSD Hello everyone! 🛎 Let check the trading idea for GBPUSD 🤗 Not making anything difficult everything is pretty straightforward. 👉 1. Price goes ABOVE the selected range on the picture. Long positions to activate. 🟢 👉 2. Price goes BELOW the selected range. below. Short positions to activate. 🔴 ---------------------------------------------------------------------------------------------------------------------------- ⚠️ Important Notes: 1. Always follow your trading plan regarding entry, risk management, and trade management. ❗️❗️❗️ 2. Timeframes: up to H1 ---------------------------------------------------------------------------------------------------------------------------- 😉 If you like the idea there was a like 🚀 and sign up so you can continue receiving great ideas like this one and also for us to make pattern the idea! 🤝 💪 Profitable lock for everyone! 🙏
by Solidity_best_options
4
XAGUSD - potential setupsFX_IDC:XAGUSD Hello everyone! 🛎 Let check the trading idea for XAGUSD 🤗 Not making anything difficult everything is pretty straightforward. 👉 1. Price goes ABOVE the selected range on the picture. Long positions to activate. 🟢 👉 2. Price goes BELOW the selected range. below. Short positions to activate. 🔴 ---------------------------------------------------------------------------------------------------------------------------- ⚠️ Important Notes: 1. Always follow your trading plan regarding entry, risk management, and trade management. ❗️❗️❗️ 2. Timeframes: up to H4 ---------------------------------------------------------------------------------------------------------------------------- 😉 If you like the idea there was a like 🚀 and sign up so you can continue receiving great ideas like this one and also for us to make pattern the idea! 🤝 💪 Profitable lock for everyone! 🙏
FX_IDC:XAGUSD
by Solidity_best_options
4
RTX - potential setupsNYSE:RTX Raytheon Technologies Corporation , an aerospace and defense company, provides systems and services for the commercial, military, and government customers worldwide. It operates through four segments: Collins Aerospace Systems, Pratt & Whitney, Raytheon Intelligence & Space, and Raytheon Missiles & Defense. ------------------------------------------------------------------------------------------------------------ 👉 1. Price goes ABOVE the selected range on the picture. Long positions to activate. 👉 2. Price goes BELOW the selected range. below. Short positions to activate. ⚠️ Important Notes: 1. Follow your risk management rules. 2. Timeframes: up to 1D Good luck and profit to all
NYSE:RTX
by Solidity_best_options
2