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VIX CBOE Volatility Index

Dxy Dropped. VIX Dropped. You Know What That Means?Traders, SPY has bounced exactly as the charts had shown us it would do. I will briefly discuss what we can expect now in the weeks ahead as we continue our move towards the target of our blowoff top. We will also look at a few of my short plays. I will discuss what I was thinking in entering and what I expect now. I was stopped out of the NVDA play and will update my spreadsheet soon! BTC and SOL shorts are still on and SOL is well into profit. Stewdamus
INDEX:BTCUSDLong
by stewdamus
3
VIX WARNING RALLY is SHORT COVERING SQUEEZE like I said The chart posted is the VIX of the VIX the VVIX has the cycle which I stated on monday and friday last week a short squeeze is now setup as the13.8 to 15.2 week decline would see a sharp rally. And that the IYT RSP BA and TNX were making a ending of a 5WAVES pattern we are only going to see an ABC rally and the last 5 days have been wave A so CAUTION I think the wave strurture in TLT is that of a wave 4 it should not get above 88.3 if that is the correct count then we will see a print of 81.5 to 79.6 and the VIX will be well into 29.6 to 38 so take any profits NOW
V
by wavetimer
USCCI - Consumer Confidence Index - Recession is HereThe US Consumer Confidence Index (USCCI) does not look so good. Consumers (normal people) are feeling anxious about their future, and they have good reasons for that. The Bull Market did not last long after the Covid Pandemic and people don't feel optimistic about their future spending or wealth. If you don't know what the CCI is, no worries, I will briefly explain, so that a 12 year old will know. A very well-known university in Michigan started doing some surveys a long time ago. They were asking people how they feel about their future, about their spending confidence, etc. Basically, you can also ask yourself: Can you afford a new car now? Are you making more money now then you were 2 years ago? Do you have financial stability? How do you feel about that? Are you thinking of moving into a new, nicer home? For me it's a NO for most questions above. Not sure about you... Now, if I may continue, I will tell you this: people are scared. In fact, Covid shocked the world as we know it. We got used to being bullied by the higher, running forces in the world. Anyway, there are many factors for which Consumers are pessimistic at these times: - War & Tensions: Ukraine vs. Russia - Inflation Spike - Energy Crisis - Federal Reserve (FED) Interest Rate Hike - Surging Prices - Bear Market Fears - Recession Talks Remember this: WINTER IS COMING! No joke, many will suffer. The media plays a major role with inflicting sentiments in your mind. As for me, I'm more of a technical guy, so I go with what my technical analysis tells me. Until now I mentioned my personal fundamental analysis take. I'm not optimistic about the markets. The FED messed it all up. They overreacted with that Quantitative Easing (QE). Artificial (fake & printed) money was injected, and of course it lost its value. Because of that, Inflation skyrocketed, and of course they're surprised. NO! It's the oldest trick in the book. They are controlling the global economy. It's actually them who are causing inflation or stagflation, and also them who are switching bullish and bearish gears. But enough about that. I'm gonna' switch to the Technical Side. I just wanted to get that off my chest. LOL So, I'm an Elliottician. That means I trade by using the Elliott Wave Theory. It proven to me over the years that it works. The Market's price movements are simply suman beings buy & sell emotions, as a herd. Yeah, they're all sheep, and most indicators are based those herd emotions. So, on this USCCI chart, which is coming from 1953, I'm labeling my Elliott Wave Count. What I see is a Triple Three Complex Correction, in a very BIG degree. TradingView calls it: Elliott Triple Combo Wave (WXYXZ). Based on that Wave Count, I am suspecting more down-side to this chart. In a nutshell, I'm anticipating a RECESSION. How big it will be and how long it will last, that depends. For what I know, the Bear Market has already started for Indices globally. My VIX (Volatility Index) idea backs this up. Short and simple: the USCCI would tag the 61.8% Fibonacci Retracement of Wave A (white). That's a point of interest for bulls, because it reflects the Golden Ratio. If it breaches and goes lower than that, then it's not just a Recession anymore, it's gonna' be more like a Depression. 1929 all over again. Funny how these Cycles come into play... My chart has labels and infographic stuff. Write a comment if you want, give a like if you give a :poop: :D Good luck!
ECONOMICS:USCCI
by Lionheart-EWA
5
Weekend Update - Stocks and Bitcoin DivergenceTraders, If you've been reading my static posts, you'll know that the SPY has reached its downside target of 410 for the head and shoulders pattern that we've been watching. It's now looking like a bounce can be expected. I'll briefly touch on what I am seeing on the SPY chart as well as the DXY, VIX, and, of course, Bitcoin. I'll also quickly brief you all on my Bitcoin short trade and what I am expecting might occur here. Best, Stew
INDEX:BTCUSD
by stewdamus
1
A Traders’ Weekly Playbook; Buying risk when its darkestA Traders’ Playbook; Buying risk when its darkest Equities continue to find few friends and reviewing so many of the daily and weekly set-ups in our core equity indices, standing in front of the move and countering seems a low probability outcome at this juncture. The China CN50 and AUS200 look particularly weak, while EU equity markets are in steep decline, with price breaking level after level. In the US, the NAS100 sits on a huge support zone seen between 14,560 and 14,430, with the US500 eyeing the 4 Oct swing low at 4200 – if these levels are broken this week and SPX 20-day realised volatility rises further, then market chatter will centre on the S&P500 pushing towards 4000. The contrarians have started to look at sentiment and throw out a range of charts, including deteriorating market breadth and the number of stocks (in an index) below the 20-, 50- or 200-day moving average, that have an RSI below 30, or resides at 4-week lows. On current standings we’re not yet near a point of maximum bearishness. The CNN Fear and Greed can do a good job capturing the mood across markets and this says a similar message. The time for contrarianism is approaching – and who doesn’t love a tradeable V-bottom – but it isn’t now. Maybe corporate earnings can have a more positive effect and stabilise sentiment. With 47% of the S&P 500 market cap reporting this week, this is the week it could happen, and guidance and outlooks from CEOs can play a more important role. The macro matters though, and we continue to focus on geopolitical headlines, moves in the US 10- and 30-year Treasury, volatility, and energy markets. With bonds offering no defence in the portfolio, traders continue to manage drawdown risk through volatility, gold, and the CHF as the preeminent hedges. The USD hasn’t performed as well as some had hoped through this period of equity drawdown and rise in long-end bond yields. One factor is that we’re seeing a rise in EU and Chinese growth momentum, so the rest of the world is looking less bad. We also regress and understand that the CHF acts more like gold in times of geopolitical tensions, and after a 7.8% rally between July and October (in the DXY), consolidation in the USD index was always a possibility. Keep an eye on USDCNH and USDJPY as a guide, and the fact we see both pairs in a sideways consolidation is keeping broad G10 FX volatility subdued and a factor keeping the USD from moving freely on a broad FX basis. As many try and pick a turn in equity markets, a bounce in risk this week can't be ruled out, and we need to be open-minded to all possibilities – its fighting an evolving momentum though and many will prefer to initiative (or add) shorts into any rallies, rather than fight it. Buying risk when it's darkest and sentiment is rock bottom is a well-adopted market philosophy but I’m not sure we’re there just yet. Marquee data points for next week: • EU manufacturing/services PMI (24 Oct 19:00) – the market consensus is we see the diffusion index print 43.6 (from 43.4 in September) and the services index at 48.6 (from 48.7) • UK manufacturing/services PMI (24 Oct 19:30) -– the market consensus is we see the diffusion index print 44.6 (from 44.3 in September) and services at 49.3 (unchanged 49.3). A better services print could see a big reaction in GBP given how short the market has got. • Australia Q3 CPI (25 Oct 11:30 AEDT) – the consensus sees headline CPI at 5.3% yoy (from 6%) / core CPI at 5.0% yoy (5.9%). The Aussie interest rates markets price a hike on 7 Nov at 34% - so, if we get a CPI print above 5.4%, we could see the market pricing a hike at the November RBA meeting at or above 50%. AUDNZD has been the best expression for AUD bulls but is coming into a supply zone around 1.0850. • US S&P manufacturing/services PMI (25 Oct 00:45 AEDT) – a data point the market could completely ignore or could be the trigger for a sizeable reaction – the consensus is we see manufacturing at 49.9 (from 49.8) and services at 49.9 (50.1). • BoC meeting Canada (26 Oct 01:00 AEDT) – the swaps market ascribes very little chance of a hike at this meeting, and only 6bp of hikes through to March 2024 – if the tone of the statement suggests a greater risk of hikes in the future, then the CAD should rally. • ECB meeting (26 Oct 23:15 AEDT) – the ECB won’t hike at this meeting, so the focus falls on their guidance on the economic outlook and hurdle for hikes in the future. There will also be a focus on the bank’s plans to increase QT, and even look at the timeline on sales from APP and PEPP bond purchase program – if this is brought forward from Jan 2025 the market would see this EUR positive. • US Core PCE inflation (27 Oct 23:30 AEDT) – US headline PCE inflation is eyed at 3.4% (from 3.5%) and core 3.7% (3.9%) – it would have to be a big number to put a hike at the Dec FOMC meeting on the table – a November hike is not up for debate and the market sees a hold as a full-gone conclusion. • Chile central bank meeting (27 Oct 08:00 AEDT) – The market looks for a 50bp rate cut, but there are risks for 75bp – can USDCLP print new cycle highs? Central bank speakers: Fed speakers – Powell (26 Oct 07:35 AEDT – unlikely to offer any new market intel). Waller (27 Oct 00:00 AEDT) and Barr BoE speakers – Cuncliffe (27 Oct 03:45) RBA speakers – Gov Bullock (24 Oct 19:00 AEDT) & Bullock and Kent both appearing at the Senate testimony (26 Oct 09:00 AEDT) Marquee US earnings and the implied move on the day of earnings (derived from options pricing) – on the week we see 43% of the S&P500 market cap reporting. Marquee names include - Alphabet (4.8%), Microsoft (4.1%), IBM (2.7%), Meta (8.6%), Amazon (6.4%), Intel (6.6%), Exxon (2.4%)
PEPPERSTONE:NAS100Short
by Pepperstone
Trader Thoughts – when realised vol rises that’s when we worrySentiment in markets continues to sour, with the market heading towards the safety of gold, the CHF and equity index volatility. We see the VIX index above 20%, showing a pickup in market players hedging equity drawdown, and paying up for downside puts in the S&P500. The VIX index at 21.4% equates to implied daily moves in the US500 of 1.34%, and 3% over the week. The market's key concern, and a critical mover of risk, remain concerns surrounding an escalation in the countries involved in the geopolitical tensions, with the US unable to contain the conflict. It is becoming one largely correlated trade – new headlines emerge, Brent crude, and to a lesser extent (currently) EU Nat gas rallies, and we subsequently see buyers in the CHF and gold. Equity vol also rises, and funds rotate into defensive areas of the market and offset risk through energy names. It would be when we see S&P500 realised volatility moving higher that should see things move even more aggressively. This is where we see a lot of the hedge funds that target a specific level of volatility start to reduce equity holdings, while CTA’s (systematic trend following funds) would also reduce exposures. With reduced buyers in the market and higher vols, this is the time when short sellers will see their ideal conditions to deploy strategies. As we see S&P500 10-day realised vol remains subdued, but any lift could have big implications. The other aspect of the market cross-current is the ever-higher yields in 10- and 30-year US Treasuries. This has in part been driven by a rise in US real rates (bonds adjusted for expected inflation over that period). But also, ‘term premium’, or the additional compensation bond investors require to hold longer-dated debt rather than simply holding and rolling over 2-year Treasuries upon maturity. A resilient US economy is partly behind that, and so is the Fed’s current commitment to higher for longer. The deteriorating US fiscal position is likely playing a role in higher long-end yields too and the notion of increasing supply from the US Treasury department, a factor even Jay Powell mentioned last night was “unsustainable”. As we head to the next US Treasury Quarterly Refunding date in November, the fact President Biden is requesting a $100b aid package for Israel and Ukraine to a leaderless House will only exacerbate concerns around Increasing bond supply and the potential demand from private investors. While fixed-income investors see the conviction in trading Treasury curve steepeners, many others ask, “Will something in the system break”? Well, we look for the signal in the price action in credit, volatility, and bank equity. For now, what may be more prevalent, in the shorter term, would be a sharp rise in energy that moves concurrently with even higher long-end yields – that would be a toxic mix for risk. As we close out the week, traders will be paying attention to the tape today as we roll into European and US trade – Will traders de-risk going into the weekend and put further safe-haven bets on, seeing the potential for another gapping risk in Monday's cash and futures open?
PEPPERSTONE:US500Short
by Pepperstone
VIX long term WAVE C down will be UGLY once wave B is topI think all should understand that I am looking for that last short squeeze in the markets and NOT by any mean a new Bull market . My view is based on DATA of 123 yrs NOT wishful thinking . way too many of you have not lived thru a true bear market I have lived thru 5 and this will be my 6th I have studied Every bear market I will warning all a second time this is the last leg up . and if you do not want to be holding on with loses for 3 to 5 years use the last wave up to take advantage of the yields in 2 yr paper or just stay in 30 to 90 tbills the return will be one as the market is going to drop .382 of the whole move up 1974 or 2009 both will be very painful
FRED:VIXCLS
by wavetimer
1
Why it might make sense to craft a tail hedge now! Say you’re bearish but find yourself confused by the market. You want to partake in the action if things go south, but not 100% certain, what could you do? First, you could build some conviction by identifying potential reasons why you think the market could dip lower… Then, devise a ‘tail hedge’ to profit if things indeed go south. Let’s break down these two steps this week. In our past two articles, we've highlighted a couple of reasons why we lean bearish. You can find them here: S&P500 Vulnerabilities: from Money Supply to Sectoral Imbalanc & Why we’re watching the Bond/Equity Volatility . But as each week unfolds with more drama, let's revisit the market. The first idea we want to bring up is the rates-equity dislocation. On the equities front, we observe the following: The conventional wisdom has long held that low rates are good for stocks. However, with stocks rising while the Fed hikes rates, has this relationship been disrupted? From 2020 to the end of 2021, we clearly observed this classic dynamic. However, from September 2022 onwards, as stocks continued their ascent despite the Fed's rate hikes, a distinct shift became evident. Could this Equity-Rate dislocation be a by-product of the AI hype? Consider Nvidia’s stock price, which seemingly pinpointed the Nasdaq's low point. Question is… Is the AI hype a strong enough factor to permanently alter this relationship? In terms of overarching themes, there are generally defined up and down trends. AI ETFs seem to provide a rough gauge of the sector's peaks and troughs. With the previous peak in 2021 happening in the ETFs right before Nvdia peaks, again now we see a similar trend with the ETFs seemingly having peaked while Nvida trades slightly higher still, and we wonder for how long more? If this signals a pivot for Nvidia, then the Nasdaq, currently buoyed by AI hype, could falter. Now, turning to rates: What could drive rates higher? A string of robust US economic data regarding jobs and inflation has emerged. Recent figures for CPI, PPI, and NFP all exceeded consensus estimates, suggesting a robust US economy. Such data might embolden the Federal Reserve to maintain its tightening cycle. One way to interpret robust economic figures is through an economic surprise index, such as the Citi Economic Surprise Index. This metric quantifies the differences between actual economic outcomes and projections. A positive number indicates that the economy is outperforming expectations. When you overlay the Citi economic surprise index against the 13-week change in 10-year yields, a clear correlation emerges. When the economy outperforms predictions, yields tend to move in tandem. This increase in yield represents a significant deviation from its nearly 3-decade trend. Broadly speaking, the Nasdaq 100 Index hasn't experienced such a pronounced change in yield trends since its inception. On Volatility, Erik Norland from CME highlights an intriguing observation: the relationship between the yield curve slope and VIX when viewed from a 2-year average perspective. He suggests that equity volatility and the yield curve follow cyclical patterns, typified by specific periods: 1) Pre-Recession & Recession -Flat yield curve and high volatility 2) Early Recovery – Steep Yield Curve & High Volatility 3) Mid Expansion – Steep Yield Curve and Low Volatility 4) Late Expansion – Flat Yield Curve and Low Volatility Plotted, the cycle looks like this for the 1990s period; As well as the 2000s; Given our current position in the Equity Volatility-Yield Curve cycle, we might be bracing for higher volatility ahead as we're likely situated near the cycle's bottom left quadrant. If the trifecta of rising yields, waning AI hype, and a nascent high-volatility regime comes to fruition, then investing in tail hedges might be a savvy move. One potential structure for a tail hedge could be the 1X2 ratio put spread. This strategy could offer protection against adverse market movements, with the flexibility to structure it so that initial costs could be negligible or even result in a net credit. Additionally, the put ratio is typically a long vega strategy, which could be beneficial in a high-volatility environment. The 1X2 ratio put spread can be set up by taking 2 positions, 1) A short position on the Nasdaq 100 Index Futures with a strike price below the current level 2) A long position on 2 Nasdaq 100 Index Futures with a strike price further below the short option strike At the current index level for the Nasdaq 100 Futures March 2024 contract of 15,520, we could take a short position on the March 2024 put option with a strike price of 14,800 at 304.25 points credit and 2 long positions on the March 2024 put option with a strike price of 13,800 at 122.5 points debit. The setup cost of the put ratio is 304.25 – (2 * 122.5) = 59.25 points, resulting in a net credit. The maximum loss occurs when the underlying asset settles at 13,800 by option expiry, leading to a potential maximum loss calculated as follows: Long put options both expire worthless: -122.5 * 2 = -245 points Short put option: 13,800 – 14,800 = -1000 + 304.25 = -695.75 points Maximum loss = 940.75 points Considering the potential for loss and the associated risks, several profit scenarios emerge. If, as we discussed, the yield trend shifts and the AI hype subsides, the Nasdaq could potentially plummet. If the Nasdaq falls beyond the 13,104 level by option expiry, the strategy could be profitable. Conversely, if the Nasdaq remains range-bound at its current level or rises by expiry, we could also benefit from the initial credit received. Each 0.25 index point is equivalent to $5. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. A full version of the disclaimer is available in our profile description. Reference: www.yardeni.com www.cmegroup.com www.cmegroup.com
NASDAQ:NDXShort
by inspirante
$SPX analysis short & longer termCBOE:SPX chart is quite INTERESTING. We can see the obvious short term downtrend. We're currently at the bottom part of the GAP. Volume has been a lil lighter, holiday is likely the reason. RSI broke the downtrend it was in Maintained the longer term 2022 low up trend. Can AMEX:SPY reach the top part of the current downtrend? AMEX:SPXS AMEX:SPXL ------- Weekly CBOE:SPX Trading under the red moving avgerage. Still looks similar to 2022. Monthly AMEX:SPY MACD & RSI bounce do not look very strong from 9/22 lows. Does look like a lil bit like a cup & handle formation, interesting. Time will tell if that is what is forming/formed. TVC:VIX not showing much on the Monthly charts. Weekly MACD & RSI is showing some strength.
SP:SPX
by ROYAL_OAK_INC
🟥 NEW LOW on IWC - Market Commentary⬇️ IWC NEW LOW The microcap ETF (IWC) has made a new low. This is not good at all. On the good side we did close up on the day - so we can call this a Rally Day and wait for a Follow Through Day (FTD). ↗️ WAITING FOR FTD SPX is sitting on the 200D Moving Average and Nasdaq s on day 6 of its Rally Day (marketd as RD on the chart). We are waiting for those FTDs in order to get into the action on the long side. 😰 FEAR NEEDS TO PICK UP The VIX like I said in my previous note, to print a picture perfect bottoming action, would need to double its low of 16, meaning a shakeout with VIX jumping to 24 would be a positive sign. 👨‍👨‍👧‍👦 SENTIMENT Sentiment is horribly bad - which is so negative it could be showing a market bottom. The chart below shows the % of stocks above the 50D (pane1), 200D (pane2) and the VIX (pane3). Only 32% of the stocks are above 200D which is v. bearish. Why we look at this? Because any real bull market would require participation from more than 7 mega cap stocks in order to be a) strong and b) lasting. Otherwise it is a very thin market - which is not healthy. 🚽 FLUSH POSSIBILTY I am cautious also that because the last couple of days we are seeing dislocations in relationships that are actually correlated *historically*. I am refering to interest, forex, utilities, bonds, commodities and so on. E.g. Oil broke down and the interest rates and the dollar went up. When this has happened historically there are a higher chance of a flush occuring. The probability is stacking but it would be a black swan. For the newbies a flush is a mini-crash. 📅 STAY ALERT REMEMBER We are always 4-5 days away to a new Bull Market. This is the time to keep your eye on the market. Know what the leading RS names are. Also we are about to enter earning season. Be cautious. My strategy is to never go into an earnings event unless I have enough profit to justify the implied volatility.
TVC:VIX
by TintinTrading
"Aggressive" VIX Short/ES Long SetupPossible volatility short/equities long shaping up. Still a lot of downside momentum/catching a bit of a falling knife + we'd rather see the NQ fill its gap south of 14400, but it could be time to start thinking about index longs given the levels both stocks and vol are approaching. Given that the Nasdaq still has further to fall before completing its gap fill, the ES could easily continue its decline (watch support/resistance levels ~4200). Something to keep in mind... Personally, we are waiting for confirmation entries before buying (looking for trend reversal signals on small timeframes), but more aggressive traders may find existing conditions more suitable for starter positions. Targeting is loosely based off of the red ES zones, but can also be mechanically derived and should be refined. Good luck! JHart @ LionHart Trading
TVC:VIXLong
by LionHart_Trading
Exploding MOVE/VIX Ratio: A Major Warning SignHey everyone 👋 Guess what? This post was created by two TradingView users! @SquishTrade and I collaborated on this post. We wanted to share our thoughts about the MOVE/VIX ratio, which has been exploding recently, and which may be presenting a warning about the future movement of the S&P 500 ( SPX ). Before we begin, here's a bit more about the MOVE index: The MOVE Bond Market Volatility Index measures the expected volatility of the U.S. Treasury bond market. It is calculated based on the prices of options contracts on Treasury bonds. The higher the price of these options, the higher the expected volatility of the market. The MOVE index is widely used by investors, traders, and analysts as a measure of risk in the bond market, as changes in market volatility can have a significant impact on the prices of bonds and other financial instruments. The above image shows a 10-year U.S. Treasury bond issued in 1976. Here's a bit more about the VIX volatility index: The VIX is a measure of volatility in the stock market. More specifically, the VIX measures volatility by using weighted prices of SPX index options with near-term expiration dates. When the VIX volatility index was created by the Chicago Board Options Exchange (CBOE) in 1993, it was calculated using at-the-money (ATM) options. In 2003, the calculation was modified to include a much wider range of ATM and out-of-the-money (OTM) strikes with a non-zero bid. The only SPX options that are considered by the volatility index calculation are those whose expiry period lies within more than 23 days and less than 37 days. The above image shows the highest VIX ever recorded at the close of a trading day. It occurred near the start of the COVID-19 pandemic shutdown. Recently, @SquishTrade discovered that the ratio between the MOVE bond volatility index and the VIX volatility index has been rising along a trend line (as shown below). Indeed, since 2021, the MOVE/VIX ratio has been exploding higher and is now approaching the highest level ever. @SquishTrade identified that the daily chart of the MOVE/VIX ratio has shown a moderately strong positive correlation to moves in the S&P 500, this correlation appears to be statistically significant. Citing the above chart, @SquishTrade further explains that: The peaks in MOVE/VIX seem to correlate with peaks in SPX, especially since late 2021 (exceptions in yellow circles). This makes sense. When a rise in MOVE occurs, but VIX stays low, this raises the ratio. Of course, when VIX stays low, it's almost always because SPX price has risen or remains supported. Overall, higher MOVE and lower VIX suggest underlying problems in broader bond markets / financial system / economy AND that this is not being reflected in implied volatility (IV) for SPX. In other words, for a variety of reasons, some of which may have to do with volatility players, equity volatility shows that equities don't care yet. When the VIX rises, the ratio falls. The interesting thing is that the peaks in MOVE/VIX correspond with the peaks in the SPX. The other interesting thing is the general trend up in MOVE/VIX and the corresponding trend down in SPX since late 2021. So when MOVE/VIX peaks, it is as if rates markets are flashing red, and SPX is rallying like all is well. That process continues until a top in both SPX and MOVE/VIX occurs, at which time SPX gets the memo, VIX rises, and the MOVE/VIX and SPX fall together. My response to @SquishTrade's above analysis is that: It is my belief that the explosive move higher in the MOVE/VIX ratio relates to the capital dislocation hypothesis, which I explain in further detail in my TradingView post below: In short, the capital dislocation hypothesis is that there is far too much capital in the stock market (SPX) for bond yields to be as high as they are (and while GDP growth is also as low as it currently is). Similarly, S&P 500 volatility (VIX) is far too low for bond volatility (MOVE) to be as high as it is, as @SquishTrade alludes above. Exeter's inverted pyramid (shown below) ranks financial assets according to safety, with the safest assets at the bottom of the inverted pyramid. Whenever an asset lower down on the inverted pyramid becomes volatile, riskier assets above it tend to experience some greater degree of volatility. This often occurs on a lagging basis since macroeconomic processes are not instantaneous. Therefore, we can extrapolate that the extreme volatility of U.S. Treasury bonds will likely precede extreme volatility in riskier asset classes, including stocks. Consequently, the exploding MOVE/VIX ratio is likely a warning that the VIX may move much higher soon. Chart analysis of the VIX, as shown below, potentially supports this conclusion. Bond volatility, as measured by the MOVE index, has likely increased due to the market's extreme uncertainty about the future of interest rates and monetary policy. This extreme uncertainty underpins the stagflation paradox: persistently high inflation pulls the central bank toward monetary tightening (higher bond yields) while liquidity issues and slowing economic growth pull the central bank toward monetary easing (lower bond yields), thus resulting in bond volatility. The explosion of bond volatility is likely a sign of impending stagflation, which may be severe. For more of my stagflation analysis, you can read the below post: Certain futures markets, such as the Eurodollar futures market, which typically guides the Federal Reserve's monetary policy, have been experiencing historically high volatility, as shown below. The above futures chart suggests that the uncertainty about future interest rates stems directly from ambivalent market participants. Since the Federal Reserve generally follows the market, if there is extreme uncertainty and ambivalence about the future of interest rates among market participants then the result will likely be a period of whipsawing monetary policy (whereby the Fed hikes, cuts, hikes, and cuts interest rates in rapid succession). In the quarters and years to come, we will likely see extreme monetary policy whipsaw as the Federal Reserve grapples with the dueling high inflation and slowing economic growth crises that characterize stagflation. Be sure to follow @SquishTrade on TradingView, and let us know in the comments below if you would like us to collaborate on additional posts! If you're interested in collaborating with us, also let us know! Important Disclaimer Nothing in this post should be considered financial advice. Trading and investing always involve risks and one should carefully review all such risks before making a trade or investment decision. Do not buy or sell any security based on anything in this post. Please consult with a financial advisor before making any financial decisions. This post is for educational purposes only.
TVC:MOVE
by SpyMasterTrades
180
X Marks the SpotMister X marked the spot. He did it again in January of 2023. And apparently, he called it again. Unfortunately for the markets, mister X has a double identity. Mr. ❎ = Mr. ➡️ (mister x is my homie mister right) Classic technical analysis proves them right. 1. Volatility VIX is compressing, forming a triple bottom. (amongst other taboo signals) 2. Volume Stock market growth commonly shows volume divergence. ES1! Volume helps us see a clearer picture on SPX. After each instance, pain followed. Will this time be different? I may follow up to this idea with further information. I may not. Either way, be careful on who you trust (and when). One thing may be for certain. The time will come when X will miss the spot. Tread lightly, for this is hallowed ground. -Father Grigori P.S. For more information on volatility, you may take a look at the idea I posted a while ago.
CME_MINI:ES1!
by akikostas
9 day VIX signal for I.T.Low in markets is setting up nice The chart posted is one of the 9 vix .It is one my tools in my Models to determine market turns . we hit a near perfect .382 at the Peak in vix . I had talked about a level to watch in the single day vix of 18.88 and 19.89 often . I feel we are coming into the cycle the panic scycle were due into sept 21/23 and I feel that the 9/25 was the bulk of the drop I have been taken positions for what I feel is going to be the LAST BEAR MARKET RALLY PHASE. I maintain a view We will see 4731 +or - 13 now for the lasting top . I maintain that oct 13 2022 was wave A of super cycle bear
CBOE:VIX9D
by wavetimer
SPX | Don't fall for the trap...SPX is plowing through higher highs. It is a runaway train. Have you entered that train yet? You better enter it because SPX will soar! But runaway trains have the fate of collapsing in on themselves. Their weight is too much for the foundation to sustain. Not all is SPX. VIX is also attempting to measure the risk involved in SPX. And VIX is as bullish as it gets. But not all is VIX. It is important to analyze the volatility of volatility. We are really entering inception levels here. Volatility is too low and too stable . It is as if it is pressured to make all-time-lows. With such a low VVIX reading, we can conclude that VIX is having no second thought on dropping even further. Curiously, the VVIX/VIX ratio is a neat SPX tracker. I have posted about it ages ago. So what can we conclude about volatility? Historically, similar volatility traps have lead to severe crashes in the stock market. Will this time be any different? So what is in for the future? Perhaps an all-time high for SPX will come first. It is not that far... Then, perhaps some SPX divergence against VVIX/VIX. SPX to move higher with VVIX/VIX moving lower. And then darkness. Tread lightly, for this is hallowed ground. -Father Grigori
V
by akikostas
11