Can a bear market end without capitulation?We haven't seen a big sell-off or capitulation.
VIX didn't go above 35.
Is this bear market going to end without a capitulation?
VIX CBOE Volatility Index
VIX Will Go UP! Buy!
Hello,Traders!
VIX broke out of the
Falling wedge so we are
Now bullish biased and
A move up is likely
Buy!
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The PERFECT Trading Plan, 12 Feb 2023🖼 Daily Technical Picture 📈
➤ Here's my plan of attack for the early part of next week if all things go according to plan:
⦿ I am already holding a small short position in the equity market. I'm looking for further downside to play out in the next couple of weeks. The major catalyst is the US inflation data release this coming Tuesday.
⦿ As illustrated on my chart, this is the idealized path I would like to see the price take in accordance to my trade plan. I would like to see the price move flat or higher on Monday. This is very possible given that there might be further buying support flowing on from Friday.
⦿ On inflation data Tuesday, I would like to see equities sell-off. A sufficiently aggressive sell-off will provide me with the opportunity to add to my shorts to a maximum position size.
⦿ I would like to see prices continue falling for the remainder of the week and beyond. The primary price target would be down to 390 on SPY or 3900 on SPX500.
❓What can go wrong?
⤑ A lot. The second worst scenario is that Bulls take charge on the release of the inflation data and drive prices aggressively closing beyond 417 on the SPY or VIX collapses below 17. This will force me out of my position with a loss. Although It won't be disastrous given my small position size.
⤑ The worst scenario is after adding to a maximum position, price reverses aggressively higher beyond 417 on the SPY or the VIX collapses below 17. This will inflict maximum loss.
➤ Conclusion: It nevers goes to plan.
✅VIX GROWTH AHEAD|LONG🚀
✅VIX was trading in a falling wedge
But now we are seeing a bullish breakout
So I am locally bullish biased
And I think that the pair will go further up
LONG🚀
✅Like and subscribe to never miss a new idea!✅
Here's What I see for Bitcoin and CryptoTraders/Investors,
Everything is playing out as expected. This is good news, however, we must always proceed carefully, cautiously, and with good trade strategy. Previously, I indicated what indicators we are waiting for to enter/re-enter this latest bull move. Those indicators have occurred. Now, we must look at what could be next.
Stew
You Haven't Seen Anything Yet. Warning!The trend was started in 2017. Covid crash was just a bump on the road to something really big.... Once in a lifetime crash in one the way IMO...
$SPX $VIX perfect bounce of the VIX off its long term uptrend perfect bounce of the VIX off its long term uptrend, doesn't bode well for indexes most likely
The Last Supper, 10 Feb 2023🖼 Daily Technical Picture 📈
➤ I’m no Trading God, but was today’s price action the Last Supper for the Bulls? Is the free flow of sweet wine about to be cut-off? Not sure if this reference was blasphemous, I plead for mercy.
➤ Equities opened the trading day aggressively higher but by the end of day it was a complete 180° reversal of fortune. What do I make of this?
➤ Clearly, the Bears would be encouraged by today's price action. Price has definitively closed back below the resistance zone. VIX has responded by moving back above 20 from where previous downtrends began in ernest.
➤ The only wrinkle and it may be a very short-term one is that the drop from the recent high is not a change in behaviour. i.e. this drop is nothing out of the ordinary. The two key observations for a change of behaviour are:
➊ out-sized bearish candle/bar or
➋ out-sized drop since the beginning of the intermediate bull trend (since Jan 2023 low)
❌ Neither of these has occurred (when comparing to the drop on 18th Jan). Of course, we just need another bearish day and we will easily fulfill observation ➋
➤ NOTE: A change of behaviour does not mean a trend has ended. It is only a warning sign (the amber coloured traffic light) that something is afoot.
➤ I still hold a small short position.
➤ Conclusion: Plenty of Bulls are drunk, tell them not to drive - translation: just be careful
our favorite vix derivative is doing its thingwhenever uvxy pops like this in a downtrend its natural to assume it will return to the bottom. except for a collapse in spx i doubt were going over recent highs in uvxy. probably end up below 4.90 again soon.
Fight or Flight.TLT is the most interesting instrument for me to analyze.
That's what has me concerned about the upcoming CPI.
You know when you are flying a plane and the instruments all start flashing and making noises.
That's what is happening the past week in equities, bonds and FX.
Trends are THE most important factor in a traders arsenal.
TLT trend follows liquidity. If liquidity is rising (TLT UP), risk is on, if liquidity is drying up (order book getting thin), risk moves to off conditions.
TLT and S&P 500 Dealer Directional Open Interest (DDOI) gamma exposure is another measurement of liquidity.
Liquidity over the past week has been under tight control and pulling back in cases like TLT.
While we are seeing big distributions intraday in equities from short squeezes and earnings hit or misses, I'm not reading that in liquidity.
It could be the fact that all 3 hedged equity funds are positive and support along with long call flows that reminisce in 2020-21 Bull Market.
Underlying weaknesses may be lurking post CPI.
If TLT breaks this trend line lower (< 103), it will likely be the earliest indicator that liquidity is drying up.
TLT on a positive uptrend meant positive flows in indexes.
The trifecta, Bonds, S&P and Hedge Equity Flows all supportive flows.
It's the primary reason I was bullish at the the following point.
DXY is another important trend to follow.
If US wants to export inflation, it would start with a trend reversal higher.
I expect DXY will come back down to test the 20D prior to CPI (FEB 14).
That's when I think when the fireworks will begin, maybe a LEFT tail and maybe a RIGHT
I missed the last CPI print in my series on Has It Peaked.
This idea and the Window of Weakness idea are just primers for what is shaping up to be an explosive few weeks ahead
VIX is acting different these past few weeks. I think we are at a Nadir on the VIX and this CPI print right in front of VIXperation/OPEX is when we'll know Higher for Longer or Viva la'Bull
FEB 14 - CPI
FEB 15 - VIXPERATION
FEB 18 - OPEX
FEB 20 - Exchange Holiday
So lots of potential for Volatility.
Vol should be well supplied into CPI
and depending on direction and how dealers are positioned for VIX/OPEX should see larger distributions than normal.
Good if you're a convexity trader.
FEB 20 Holiday is important because it's happening during a window of weakness while technical flows will be weakest until March.
Is the VIX giving a warning signHistorically, for the last 10 years, whenever there has been a non confirmation between India VIX and Nifty at new highs or lows, it has been a indication of a change in market direction. So unless the ViX falls to a new low, the last high has not been confirmed.
For reference the VIX chart is inverted
Lateral Thinking, 9 Feb 2023🖼 Daily Technical Picture 📈
➤ Equities failed to keep the upward momentum. Today, it started lower and finished even lower. Despite that, the price action was not really meaningful. In technical speak, today was an example of an "inside" day, where all the price action was situated within the shadows of yesterday's large bullish bar. Therefore, we are none-the-wiser to what tomorrow brings.
➤ I hope through my daily communications with you, you are starting to get a better feel of my approach to trading. I'd like to think that I bring a form of lateral thinking. This is my trading edge afterall.
➤ That being said, I'm thinking quite literally that markets have a high chance of moving more laterally. Price is trapped around the resistance zone. So far, there is nothing specific in the price action that displays immediate signs of a trend reversal lower. It just looks like the market is biding it's time prior to making the decisive move. The more it trades side-ways, the greater the odds of the market moving higher.
➤ I hold a small short position.
➤ Conclusion: I hope my thinking is wrong.
Mid 20s coming by end of FebCorrelates to the near-term downside everyone is seeing for the market.
Be careful bulls.
Vorhees
Gme run this week?
As stated previously in my last Idea NYSE:GME has been following a clear pattern for nearly 3 weeks now. Making new highs every 4 trading days(H1,H2,H3). Last high was made 2/2 so 4 trading days from that would be this Wednesday (H4). I expect to trade flatish/down Monday and flatish/down early Tuesday and to start going up mid/late Tuesday. I believe we can reach $25 on the next new high and when we do hedging of the option chain will cause a large run up.
We are very strongly inversely correlated with TVC:VIX and as long and it keeps its downtrend I expect gme to continue its uptrend.
I am hoping gme will do something similar to what NASDAQ:UPST did last week. It too was following the same pattern gme was. When it made a new high in the $20 range it exploded upwards to $25. I believe that happened because of the heavy options interest at $20. gme was trading at 25 for 3 months so I'm hoping the options at 25 can rocket it forward. Interestingly even after breaking out upst still appers to be following the same pattern it has been indicating its run might not be over. I will be keeping an eye on it.
Failure to delivers on gme and etfs it is in have picked up again stocksera.pythonanywhere.com and the starting date of covering them is this week. In addition, the put/call ratio on gme has become very call skewed www.barchart.com adding to my belief the option chain can propel us higher.
While I am hoping gme runs this week I will be happy as long as it maintains its uptrend. I would keep an eye on vix and other "meme stocks" and if they are staying on trend I will remain bullish on gme.
I have noticed that the general pattern for the next leg up is 1. vix goes down hard 2.gme iv goes down hard 3.gme goes up. So if you are thinking of entering in an options position, I would wait for gme iv to crush as a signal to buy.
Bulls Never Say Die, 8 Feb 2023🖼 Daily Technical Picture 📈
➤ Equities went full Bull mode today despite some intra-day volatility. It looks like it wants to surpass the recent high.
➤ There's really only one thing that could stop it and that is the super overextended nature of this Bullish move since the Oct 2022 bottom. Perhaps it is not really "stoppable". It may just be some lateral price movement to work off the exuberant enthusiasm prior to jumping higher.
➤ I am still holding my small short position until I get the exit signal to get out. For example, a daily close above the recent peak will definitely do that.
➤ Conclusion: Optimism may fade but it usually comes back. It rarely dies.
are we bottoming out in vix?its too early to tell the weekly picture, but the daily and 4hr appear to be turning the tide for the broader market in a bearish direction, and that mean uvxy could see high $5s. if we do create a top in spx, and uvxy does begin to climb today i would only at first assume its a temporary pop, but if we truly start unravelling uvxy could see high $6s. count on the market and spx returning to bull as long as were in this weekly inside bar scenario. i am all cash until we pick a direction.
$Vix - BreakoutYeah bix is actually broken as heck, not really being used properly anymore as the big guys have found other sources of buying/selling volatility. Vix is being used only intermittently now whenever other sources are not available.
That being said, i think the Vix is braking out. I wouldn't touch it though due to the reasons i mentioned above. I've opted into buying SQQQ instead which is still well in use.
SPY Uncertainty High as Trends CollidePrimary Chart: S&P 500 (SPX) as represented by SPDR S&P 500 ETF (SPY)
1. SPX and Recession
A recession is exceedingly likely in the near future. It could officially begin next month or in 4 months. But does that mean bears should be rewarded by a straight-line decline to new lows? Sadly not.
Unfortunately for market participants, the S&P 500 S&P 500 ( SP:SPX / AMEX:SPY ) has confounded bulls and bears alike in recent months. Since June 2022 lows, SPX has traded substantially within the 3800-4000 range (380-400 SPY).
After last year's lows on October 13, 2022, SPX rallied hard into mid-December 2022, only to be rejected at its down TL from its all-time highs. Down trendlines are one way of gauging a trend, especially the more times that price touches the trendline and reverses, showing it is a valid and effective dynamic boundary for market prices.
When price was rejected from the mid-December 2022 highs (on December 13, the date of that month's FOMC presser), it fell rapidly into the 3800 SPX / 380 SPY range. Then it spent over two weeks within that range doing price discovery before breaking out and retesting the downward trendline (from all-time highs) this week. Many bulls called for 4100 SPX / 410 SPY saying the lows are in. Bears furiously covered shorts. Then bears were rewarded late this week as bad macro data started to be respected by the markets.
But will bears continue to be rewarded? Just because a recession looms does not mean prices must go straight to new lows. Yes, they might, and they could very well do so, especially with the Fed not backing off much at all. But price could also find a reason to squeeze shorts one last time before heading to new lows. Be prepared for anything.
2. VIX Signals
VIX told us earlier this week that the S&P 500 ( SP:SPX / AMEX:SPY ) was in a precarious spot. A multi-year trendline on VIX lies just below where it closed Friday, January 13, 2023. This trendline provides major support at approximately 16.80 to 17.00 on VIX, and VIX closed at 18.34, its lowest level in a year (specifically, the lowest level since January 2022 when SPX had just finished making its all-time highs).
However, VIX remains within a downtrend, subject to a trendline that has contained VIX levels since they made their most recent peak at mid-October 2022 lows. Until this downtrend is broken, clarity on the next trend leg in SPX will be difficult to find. In the VIX chart below, notice the yellow downward trendline containing VIX peaks more or less. And the pink line is the long-term upward TL that has provided long-term support.
Some say TA cannot be applied to VIX. Strong opinions exist on both sides of this issue. Some of the best technical analysts serving institutions apply TA to VIX, and others do not.
Supplementary Chart A.1
To those who are skeptical, SquishTrade would ask whether you would bet against the long-term upward TL each time VIX levels have reached it. In other words, would you sell vol when VIX fell to its very long-term uptrend line? Each time it has done so, it has moved back higher off that line. See Supplementary Chart A.2.
Supplementary Chart A.2
3. SPX Triangle
A triangle is a consolidation pattern. The Primary Chart above shows the current triangle that has formed. It is essentially a collision between a 3-month uptrend and a 13-month downtrend (lasting over a year since January 2022 highs). So long as price remains in this triangle, uncertainty about the intermediate term direction will likely remain high.
Many triangles have arisen this year, and each one has led to new lows. This one may as well, as the yield curves and macro data support this outcome. But price could whipsaw out the top of the triangle for a month or two before heading to lows. All possibilities remain on the table. Expert Elliotticians have continued to change their wave counts as the year has progressed. This does not mean they are bad at their craft—it simply may point to the challenging nature of the price action.
In the intermediate term, direction remains murky given the collision between these two uptrends. Ultimately new lows should be formed. But will a powerful rally rip higher to trap bears first? Will price action whipsaw around after a triangle breakout before figuring out a recession is coming and the Fed won't come to the rescue as quickly and spectacularly as in the past? These are the questions that many are trying to answer. This post contains no short-term directional bias—it's too close to call.
So despite the powerful rally off October 2022 lows, and despite the powerful rally off late December 2022 lows, and the rapid decline this week, price remains stuck in a very large triangle on the daily chart. See Primary Chart.
Notice how the edges of this triangle align in early February (right around the FOMC meeting) at key Fibonacci levels. See Supplementary Chart B.1 The smaller blue circles point to key pivot levels at 3800 SPX / 380 SPY and 4000 / 400 SPY. The larger blue circle shows the apex of the triangle and the (compressing) range it covers from 388 to 396 / 3890-3970 SPX, where price may remain for a bit longer.
Supplementary Chart B.1
Here is an additional chart showing the Fibonacci levels a little more clearly. The key .618 retracement of the August-October 2022 decline lies at 399.79 SPY / 4000 SPX. Above that, a .786 retracement lies at 402.85 SPY. These now are both outside the downward trendline. If the downward trendline is adjusted for the whipsaws in mid-December 2022 (yellow downtrend line chart below), these key Fibonacci levels could be tagged within the "adjusted" down trendline. To the downside, notice how multiple Fibonacci levels come in right at 380 / 3800 SPX. This seems to be a line in the sand, also from a support perspective. When 3800 is decisively broken, watch out below for a new low.
Supplementary Chart B.2
Note the 200-day SMA which has been widely discussed in financial media over the past week as it was tested yet again. This 200-day SMA is the magenta EMA in Supplementary Chart B.2.
4. Anchored VWAPs
The anchored VWAPs—anchored to key swing highs and lows since June 2022—align quite well with the lower boundary of the consolidation triangle discussed, especially as more time passes and that lower boundary (an uptrend line from October 2022 lows) rises. See Supplementary Chart C.1. The VWAPs show a support range of 3870 to 3900 SPX / 836-388 SPY. If these are broken decisively, watch out for the upward trendline as it may break too. If these are held, as they have been so far this week, uncertainty remains high.
Supplementary Chart C.1
VWAPs also show confluence with two key Fibonacci retracements, the .50 retracement and the .618 retracement of the recent rally from December 22, 2022 to January 17, 2023.
Supplementary Chart C.2
Dollar to Resume Sideways/Downtrend Price Action TomorrowTraders,
From a technical perspective, the dollar is doing exactly as it should. Technical analyst should have expected a retest of what was previously very strong support. We have now observed that retest and the dollar has permission to continue its descent. If descent is not immediate, sideways action can be expected. But, least likely, is the possibility that the dollar re-breaks the macro uptrend to the top side. Vix data correlates with the continuation of the dollar's descent.
And with continued dollar descent, we should observe the market to continue onwards and upwards. Crypto will continue to follow.
Stew
First Strike, 7 Feb 2023🖼 Daily Technical Picture 📈
➤ Equities opened lower and ended from where it started. The more speculate stocks selling off more than the Bluechips. This was sufficient to get me into the Bearish mode.
➤ S&P500 is now trading below the double resistance line. I see the potential for it to drop some more. I'm using a small amount of capital to take a short position.
➤ This is also the first "live" test trade for my volatility strategy. This test involves using real capital in real trading conditions but with a small portfolio allocation.
➤ The play book going forward was outlined yesterday: A short opportunity first. This then opens up the second set of opportunities offering the high conviction trades. Increasing short positions as price weakens further with continued selling pressure or reverse with long positions if Bulls come in and support the price to invalidate the short set-up.
➤ Conclusion: Back in the game.
BTC Momentum Gone? USD + VIX say so Hi
The question these days is how much momentum do we have left in the current BTC bull run, I would love to see a leg down so we gather enough momentum to open a weekly candle above 25k. As things stand right now, there is not much to the downside for both USD and VIX and this indicates that there is not much momentum for liquidity for risk-class assets such as BTC left. On the flip side both USD and VIX have a lot of room to the upside which is going to pull money out of risk-class assets and if that happens the TA on the BTC graphs wont do much good as the market is going to react accordingly. I will be closely monitoring this myself.
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VIX: Another Warning Sign!Hello friends, today you can review the technical analysis idea on a 1M linear scale chart for the Volatility S&P 500 Index (VIX).
In this chart, you can see the VIX moving along a support trendline. When the VIX spikes upwards that means the markets (specifically S&P 500; generally all markets) start to move downwards. Every few years the VIX starts to slowly move upwards on a new support and resistance trend line before coming back down to the bottom support line. The current structure of the VIX looks very similar to the formation of the Great Recession so I show that on the chart as a possibility. I also note two support and resistance lines which the VIX could move on as it moves higher. Lastly noted is the RSI which is moving up a support line. This is a monthly chart so have some patience.
I may be completely wrong with the prediction of the VIX moving higher, but with the inflation issue, global economic condition, stock markets crashing, companies preparing for a downturn, interest rates moving higher, the US Dollar Index (DXY) moving higher and crypto market crashing, I would assume my prediction may be on point.
Click on the chart below on why I exited the crypto and stock market in December 2021:
If you enjoy my ideas, feel free to like it and drop in a comment. I love reading your comments below.
Disclosure: This is just my opinion and not any type of financial advice. I enjoy charting and discussing technical analysis. Don't trade based on my advice. Do your own research! #cryptopickk
