VIX - Trade Plan for VOL CRUSH Reversal / VXFWe will see how low this can be shoved lowered.
A Counter-Trend is possible, but the MIcros have held
for the continued Down Trend.
Far lower Targets Exist on the Daily TF.
VX1! trade ideas
VXF - Daily into 2022Volatility remains compressed with a slow and steady move lower
on declining volumes.
Protection is being bid at levels out the VX Curve at levels for
February and March Expiries.
It appears the Operators are beginning to Position ahead of the
FOMC Meeting - January 25-26 (Tuesday-Wednesday).
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Price Objectives for JAN VX (VXF) - 19.85 / 19.30 and the largest
2021 Daily extensions @ 15.20 & 12.30 for a Full extension.
In the Chart above observe the prior two Highs with successive lower
lows as VX Expanded into the end of 2021.
Clear A / B / C patterns with the current move lower building "C".
TIme indicates this move lower in VX Complex may continue into
the first week in January.
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The VX Curve remains in Contango (M1 - M4) Term Structure
JAN - 20.80 @ 9.86%
FEB - 22.85 @ 5.78%
MAR - 24.17 @ 4.14%
APR - 25.17 @ 1.71%
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October / November / December Roll to Settle arrived with Lows.
The break of the 2021 50% implies there are Higher Highs ahead, from
where is Time-Dependent - we can see the 3 Drives to a Low present prior
to large reversals.
By TIME - the same pattern suggests a Low for VX in early January.
For Price - a Higher low by approximately 100 BPS.
Unfortunately - there is a Large Daily Gap @ 17.35 for VFX for the
Continuous Contract to Fill.
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We remain patient for the Lower FIll and will wait for entry.
VXF - M1/V1 VIXVX Complex has a bit more work to do to the Lower end of the Range.
Year-End it is quite easy for the ALGOs to compress the Range into a
Full Retracement after continued failures to move and close above
the .618 @ 22.90.
There remains a concerted effort to continue the compression leading
the ES YM RTY to a Lift.
Of concern for January, China is amassing Commodities in amounts
unseen before and moving quickly to become as Food Independent
and free of all imports Net of Feed Stocks.
Soybeans were replaced with Corn for the Season, which is somewhat
curious, as Feeder Inputs appears to be a better decision for Livestock.
The CCP has been on a tear to reduce all Foreign Dependence, in excess
of 84% of all Food Stuffs have been secured internally.
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It appears China is hoarding consumables and Food Stuffs.
Commods should be watched closely into 2022 as actions taken by China
do not occur in a vacuum.
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VX Compression was noted last week in a commentary and Chart which showed
the Lower Price Objective and Compression. The Divergence within is of concern
as when compression ends - This is when we see the VIX move higher, significantly
higher.
VXF - Daily / DivergenceStealth Accumulation.
AO showing signs of Indecision.
Next few Sessions - RT.
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8:30 AM EST provides the Direction.
Bonds Falling again.
VIX - Settlement Range for Continuous ContractSpot Vix - 22.05
VXZ - 21.45
VXF - 23.70
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Tomorrow the New Continuous Contact for the VIX will begin trading.
To project Price we need to consider the VXZ / VXF Spread (Roll Yield) and
use Draws for both months to determine the Point of Convergence for Price
based upon Draws for both Contracts.
The VXF Chart above provides the Price Objectives and lower Gap FIlls.
The VIX has been trending down for some time now and may continue the
trend into year-end.
Clearly, this gives the ES YM RTY room to move higher.
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We indicated yesterday the RT Potential and Price Objectives above into the
Gap Fills as the Lower POs were front-run by a significant Margin.
The NQ kept the 615 pivot gyrating until it moved tp and through it during the
3 PM EST to 4 PM EST Hourly Bar.
In the final Hour, the NQ would trade below the 615 Pivot for the last time.
ES, exactly the same pattern.
YM, a bit different, but close.
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Into Wednesday's during Settlement, we will see the direction for the rest
of the year's - Low Volume Price action in all probability.
We traded the Lows of the Range and the A/D was sitting on Lows, it can stabilize
or Rise.
It remains a very Negative indication, as do all longer TF Charts.
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RT Anticipated, RT in Trade - Gap Fill.
VFX has some catching up to do on the downside.
It will provide a Lift to the Indices.
Momentum Cloud to Trending Cloud Supports is the Price Objectives & Gap FIlls
remain lower.
VIX - VXF DailyES makes a Lower Low, VIX Higher Low.
Sounds about correct for the VX Complex.
Trading the 50 with no break yet implies a RAT for Indexes.
.382s remains the RT POs as weakness is prevalent.
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Keeping VX collared is not working, the E YM NQ RTY continue
to sell to lower POs.
Proximity to Margin Calls is the danger now.
Mid / Large Cap Winner remain in Distro.
VIX - Daily: VXZ / VXF / VIX Spot-CashThe NQ will have the wider swings into Year-End
as the Range has expanded from 150616 to 16302.
The VIX may range into Year-End permitting the ES
to build out the Symmetry.
The NYSE Remains collared at the Lower end of the
Range.
VX has been compressing into Year-End.
Wednesday will confirm as 96% of m1 is loaded
on the CM-30 VXX.
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Implied Targets for VXX 35.16 to 45.36 on reversal.
This implies a large and very extended decline.
Donside Momentum is building, how long can they
keep this collared... we' will see.
I maintain we will test the Dialy 377 SMAs for the ES NQ YM RTY.
It will be a 5/5 decline or should be... the Algos have been very good
at breaking Candles, FIBs, and Symmetry - Far too many False moves.
There are a very Large Number of Sellers overhead for the Equity
Complex.
VX should be relieved of the foot on its throat into the new year.
VXF - 1 HourOver 23.60 and the VIX remains in a Bid and a Long.
It has become far less technical than the Indexes.
Roll to settle is creating an Arbitrage which is suppressing
the VXZ VXF VXX.
VX Complex collared by the Operators.
VXF continues to struggle at Cloud Momentum.
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4X Expiry and enormous Ranges on each Index.
Price is moving into the Lower end of the October Range.
DX Weakness may provide the sport for the Equity Complex
to produce a Counter-Trend off their Lows.
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We closed :
NQ @ 735
ES @ 635
CASH @ 100%
VXF - The Blow Monkey2:30 to 3:00 PM EST today will provide indications for Globex this evening.
Should they follow the usual suit, the Indexes will begin to grind higher into
the Close.
All of the leaders, with the exception of FB - were sold.
Continued Distribution.
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With VXZ and SPOT/CASH VIX near Par and 100% of VXX concentrated in VXF, the
horror show begins Wednesday / Thursday - that is 100% certain.
Who gets the Hall of Mirrors treatment...
Stay Tuned - as the Lower High, until it is confirmed suggests a lower low well
below the 4260 for the ES.
A higher high and a friendly Pelican with a mouth full of fish means this complete
mess could trade up into Mid January, prior to letting go into MARCH.
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VXX - FAILURE IS 21.39 and then confirmed by 21.28 then 20.36.
Sound unrealistic? Yeah, I feel ya.
VXF 21.10 Price Objective on Pullback...
VXF is above within the Chart Frame - Cloud Momentum and Trend have been the
RANGE.
Expect more complete insanity... expect nothing less.
We remain 100% CASH until 230 - 3 PM EST.
Should APPL reverse and retest the Highs, the Vomit Comet is my ride.
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ALL OR NOTHING for the Operators.
Sure would like this to be easier.... it's not.
Prefer to enjoy this, I'm not.
VXZ - VIX M1 / V1 Into Settlement240 Ticks to Gap Fill.
Settlement Wednesday.
FOMC Wednesday.
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Short Term, Gap Fill Probability
is increasing on ES Symmetry.
A Full Retracement could be in Trade.
VXF - VIX M2 / V2 Into Settlement200+ Ticks to Gap Fill
VXZ M1 / V1 lower Gap Fill
Continuous Contract simulated in next Commentary.
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ES breaks ATH this week and M1 will correct sharply.
VXF - Roll M1/V1 VXZ into next WednesdayThere are complications into next week.
In order to avoid the Dramas associated with these opposing forces - permit
me to infer the extremes have never quite been this degree of a Cluster F_ck.
Fail on Drama, apologies
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An "offsides trade" is again forming as I see 4X Negative Divergences begin to Form
once again on Larger Daily and Weekly Timeframes.
Delta is being hedged - simply not in a way most are paying attention to... typical
and opportunity.
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I am seeing 2 very distinct patterns within the Delta Squaring.
Both create immense Risk of what should be referred to as the Cascade Trade.
The over/under will depend on how aggressive the Operators become today, should they
be unable to unwilling to support Price today, it is a very large Negative Omen.
There exists a Protection Trade well below and not above.
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\We will begin to see which way this breaks shortly - Roll/Settle remains ahead.
Within the Pivot, whichever way it breaks ST will reinforce the Trend.
VIX - Below 23.65 / Globex Fun RunIndices continue their Rally.
I am posting an analogue for the Indices
this morning to demonstrate how similar
the RTs are to a recent point in time.
We see a large RT during Globex due to the
Vix beginning its pullback.
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Privately, I was contacted by a number of Traders
a few hours before the close - they all now understand
why we indicated closing all SELLs and moving to CASH
was the proper Trade Plan.
Deeply oversold conditions always RT.
China kicked the party off over the weekend with relaxed
standards for their Banks
Chinese RE ETFs had been sold wholesale over the prior
3 weeks. They began to level off Monday - the AX50 and HS
also caught support.
a clear turn around in volatility (vx1!)sell climax in S&P500 futures should drive a buy climax in volatility index futures followed by a bumpy ride back down below the $21-20 area for VIX
VIX - DAILY @ ST 2/2By the numbers, the VIX has repeatedly moved to Extension Price Objectives.
In addition, each has been exceeded signaling a move higher.
Pullbacks are limited to Globex.
High are made during RTH.
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Important SMAs Crosses... they ere a sign as well.
VIX - Daily / LTF MM's 1/2As Breath began to indicate an overall collapse in August, narrowing
of each successive move high in the NQ & ES were driven by the heavy
weights within each Index.
The "7" held their ground after Q3 reporting led to some clawback.
AMZN was the first to decline, signaling trouble ahead.
VIX start buying calls with 1 to 3 months of timeBUY vix calls in the 1 to 3 month time frame here.
use a reverse pyramid ratio so
atm 1
otm 3
deep out 6
and repeat this as a unit slowly
VXI - VXZAPEX Key - Protection remains Bid out to January 2022.
It can Pullback today or tomorrow.
It will depend on whether the Indies begin to converge
on Lower POs below, by example, the NQ can drop 300+
Points today...
No rush, patience wins here. Entries will be provided.
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Sobering up underway - Rehab T4ades are crushing the Memes.
Our dear Ape friends... AMC sub 30, was early on it breaking down
but not in doubt.
The critical issue is when Oil slows its decline as Food Producers
have already put planned prices of 20 to 22.5% in Q1 Food Prices.
When this hits... they had best have Trillions to dole out... Or Political
unrest is all but assured.
VIX - DAILY + FED @ 12/12The directors of all twelve Federal Reserve Banks favored maintaining
the current primary credit rate at the existing level (0.25 percent).
In light of the uncertainties associated with the economic outlook,
the directors judged that it would be appropriate for the FOMC to
maintain the current stance of policy
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Pelicans confirm, Policy Accident ahead
VIX - Use Support for IndicationsThe VIX remains Bid.
Large Range - which will trade.
No need to Guess.
Obey.
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22.70 to 23.10 the Support Zone.
No Shortage of MAcro Data and Fed Pelicans to
move this around.
After the 4th largest one-day percentage spike in history
and the 5th Spike this year... the Market undercurrents are
one of danger.
The Range expansion illustrates how desperate the Operators
are to continue the pillaging.
THE MOST IMPORTANT NUMBER TODAY WILL BE CB CONSUMER
CONFIDENCE.
It will shape the Trend for Today.
With CL weakening, using the 36 - 85 and 42 - 85 Draws for the
Larger Range, the YM Leading along with the NYSE COMP.
The Operators need a Save this week... desperately.
31 remains open on the VIX - 64 to 86 to 126 can open should
it break that APEX and then moves to 38/42.
Anything can happen... it is simply a disaster the FED has engineered
with this latest Credit Cycle.
I do not believe we see anything other than a Large Pullback to Daily
144's to 377s... but, again, anything can occur.
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Use the Volaitlty Complexes for Instruments - they are the Leaders.
VIX Daily - 2021 Lows to HighsWhat is encouraging after Sunday GLOBEX:
The VIX exceeded the 50% of 2021 and although
it did not make a new high against the Prior Spike High
On a Percentage Basis it was the 4th Largest Percentage Spike
The Prior Spike did NOT.
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Use the VIX Pullback for RT Targets for ES YM RTY.
VXN for NQ.
VIX Range for Today 22.30 - 25.15 with 23.40 as the Pivot
*** 22.50 is the LIS.
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With Powell speaking late today the Operators will no doubt pull
out the stops to make the Re-Anointed Chair appear Gilded.
Long week ahead as this develops.
Large Gap Below on VIX.
VIX - VXZ Front Month / MonthlyA Gap 10 Handles below - Weekly and Monthly Chart which is of concern
for the Bulls.
Delta remains the trade in the VIX.
Extensions in Trade, this can become an exponential move barring no
Monkey Business from the Operators, ESF, and FED.
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The 54.04% move Higher was the 4th largest move since the inception of the VIX.
2021 - 61.44%
2007 - 64.22%
2018 - 115.60%
For the Point move, 10 Handles ranks 18th, 2020 was 1st @ 24.86 Points.
Statistically, the percentage move on Friday is an extreme outlier.
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Price Left a lower Gap 10 Points below.
Implied Volatility of At The Money Options... need to be Observed.
VXX Spike @ 4 Highest. for M1/M2
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For Historical reference - the OEX or SP 100 Equivalent during the 1987 Reversal:
Baseline VXO (Correlated Historical) Spiked to 30 from 18.22.
At the time I was working at Drexel and will never forget how Investors began
selling OEX Puts at the Money/Above - believing the one-day event was a knockoff.
This was Friday., end of week anomaly. Screw Germany was the thinking. The Ripples
will be contained. Greenspan provided the Emergency pat down to Member Banks
the following week, reminding them - this event must be contained for everyone's
Financial health.
The S&P 500 lost 10% the week ending Friday, October 16, 1987 and lost an
additional 20% the following Monday, October 19, 1987.
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Nervousness appeared the following Monday AM briefing @ 5 AM. John Jetter asked
the team to contact clients and reduce exposure to OEX to reduce Risk.
Monday did not end well for those who did not heed his strategy.
The VXO on Equivalent - Spikesd again to 170+ Monday, setting near 150 on the Day.
This was THE largest single Daily move in Market Volatility in History.
The One Day wonder turned into the largest Bloodbath in History for Bulls and
sellers of OEX Puts, Dip Buyers, and the Pop and Fresh Peter Lynch Herd.
They were decimated, the Magellan Fund took its largest 2 Day loss ever. Small
Caos were raked - defeating the individual investors had inherent advantages
over large institutions Thesis.
Theories do jump out of High rises in a Lifetime of Investing.
Leverage was not an issue then as it is now.
It sets a preamble for enormous declines, the Potential for them.
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Will History report?
It has a higher than usual Probability of doing precisely that.
We will see, at some point, there will be an outsized retracement, from where...
Fundamentally Straight down or not at all.
Interesting times indeed.
