DE's Technical setup for WinnersShort term tech analysis to be used on stocks which are beating the S&P YTD
VOL
VXX Volatility BreakoutProjected move based on a combination of chart patterns, EW hacks, and implied volatility.
This would obviously imply a move lower Sunday/Monday on ES and SPX.
VIX TO $650? VOLATILITY READY FOR HUGE SPIKEAfter the crash in March, volatility has settled down towards the bottom and is now reversing its trend. I think ~220 was the bottom, and we are set to continue higher for the coming months. Expecting a major move to the upside to happen soon as the market resumes its declines to retest the lows made a few weeks ago.
ridethepig | VIX Market Commentary 2019.12.20A quick update to the Vix chart as we enter into the final important NY session of the year with quadruple witching. For those tracking the previous flows we remain in the same levels with the same targets and the same flows to track:
After we cleared TP1 we ran out of steam and decided to trade the retrace back towards Capitulation territory. This was enough to sweep the stops and absorb the floor:
We then got the spike in VVIX as it dislocated the from the flows while Vix remained comatose. This is an important highlight to make as we enter into year end with markets happy to trade the reflationary theme something that smells very very off;
With 2s5s screaming recession and protectionism hijacking the world what could possibly go wrong?
Tracking closely Vix today for the year end flows and 2020 positioning...We will update in depth the fundamentals and technicals 2020 maps for Vix over the holiday period.
Thanks for keeping all the support coming with likes, comments, charts, questions and etc! Best of luck those tracking VIX for signs of end of the cycle/reflationary 1H20 !!
Buy VolI am a believer that this bear market is not over.
seems unlikely to me that the longest Bull market is followed by the shortest Bear market (I stole that).
Since the advent of QE and massive Central Bank stimulus programs Volatility has been suppressed significantly.
Technically the VIX volatility index at ~$18 is a buy in my books.
Got in last week just below 18 and am looking for capitulation to sell into.
It just seems hard to believe that the Vol we saw in December was the last of it...
Good place to add hedges if you are of the opinion risk assets are going higher as well.
As major Equity indices are now sitting at a significant resistance level and have shown signs of weakness this seems like a pretty good risk/reward play right here.
I expressed my long through Options (fighting Theta).
AMDShort AMD via db. puts.
Bought 5x Apr20 $14 puts for $2.43.
Max loss: $1,35
Max win: Price to $0 (unlikely)
Target: Price at $11.40
Stop loss: $12.25
long $14 puts: 82 delta
UVXYShort UVXY via long Apr20 put debits for $2.19.
POP: 68%
Max loss: $892 (2.19 x 4)
Max Win: $308
ROC: 34.5% over 66 days
Long 24 put: 36 delta
Short 21 put: 30 delta
I usually let these expire ITM, as my broker TW has cheap exercise fees. In the case that it expires in between strikes, then I will have to manage them by closing on expiration day.
VVIX touched above 120 today (not yet pictured on chart)VVIX measures the volatility of volatility. It's an expected move in volatility, which is an expected move in stocks. Thus, it is another layer of looking at the market Last time VVIX traded above 120 was during Brexit in June 2016. This is extreme fear!
Ethereum Huge Bullish Engulfing CandleLooking for consolidation from what appear to be another bottom. Huge spike up as Eth briefly touches another bottom. These bottoms look to be very profitable and a retrace like this is healthy to form a base for a new breakout.
DYNAMIC STRADDLE: USDJPY & GBPJPY - TP FROM BOJ & FOMC EVENT VOLThe best Idea to play BOJ and FOMC from a risk-averse perspective is to own both in a Long Straddle
Strategy
Dynamic Straddle: Long USDJPY & Short GBPJPY - TP from volatility & Event likely hoods
TP levels = cannot be greedy else you may miss one trades exit point so <25 pips when it goes in your direction for each - total TP = 50pips as 2*25pips
Reasoning
- Traditional Straddle involves would be long and short the SAME cross..
- However i suggest we long USDJPY as UJ has proportionately MORE upside possibility:
1. FOMC is likely to be neutral-Hawkish, this will help UJ trade flat/ higher = Supports long -
- *FOMC PARADOX* important to note that in this sensitive risk-off market if the FED is too hawkish/ hikes it can cause a UJ sell off, as higher rates means greater economic/ market uncertainty as liquidity and financing becomes tighter (despite rate hiking usually making USD trade higher through increased $ deposit demand for higher rates)
2. BOJ is likely to be dovish, this will help UJ to trade higher (especially in this risk averse market - easing helps calm mrkts) = supports long
3. USDJPY ISNT directly impacted by BREXIT fears as GBPJPY as USD and JPY can be considered safety assets, this helps USDJPY trade higher = supports long
So we have 3/3 for long USDJPY.
- Now to hedge this trade AND benefit from possible downside,
we SHORT GBPJPY as GJ has proportionately MORE downside possibility.
1. FOMC neutral-hawkish, drives risk-off momentum (higher rates reduces market liquidity and undermines economic growth thus increasing uncertainty) which drives demand for Yen/JPY, increased demand for JPY supports short GBPJPY
2. BOJ being dovish/ easing potentially helps JPY sell off - however, GBPJPY will be the least sensitive of JPY seller of the JPY crosses, as GBPJPY is the perfect play for Brexit and risk-off, hence in the long run JPY selling wont last long in GBPJPY as once JPY is cheap, buyers will enter to continue hedging/ speculating on brexit with the favourite pair, poor potential/ long run JPY sell side = supports gbpjpy short
3. GBPJPY is directly impacted by Brexit uncertainty in two ways. 1) as investors wish to sell GBP as the uncertainty is only negative for GBP (especially when polls are at 55%). 2) as Investors wish to buy JPY for their "safe haven" asset play. UJ only has the JPY buying to push it lower, which is limited/ offset further as USD buying can also be considered a "safe haven asset) = Supports short GBPJPY
We have 3/3 for short GBPJPY
Evaluation.
- We have 3 points supporting both LONG UJ and SHORT GJ - AND by playing this trade we are able to gain from ALL eventualities, we dont have to guess the BOJ or FOMC outcomes since we have a LONG and a SHORT we have covered ALL eventualities.
- Also from a vol perspective, GBPJPY risk reversals continue to become negative by a significant amount 1wks lost 0.6 to -2.1 (from -1.5), so investors continue to demand GBPJPY downside puts for speculation/ hedging - supporting the short.
- USDJPY ATM volatility, sold off significantly with 1wks losing 3.55 to 12.45 - lower vol in UJ supports buying.
*Any questions on why i think FOMC will be neutral-Hawkish or why BOJ will be dovish-easing please ask in the comments*
BUY GOOGLE @$711 - LOWER VOLS, VOLU & LOWS; HIGHER CORRS & HIGHSGoogle C-Class shares i am bullish over the 6-12m, hence I am buying any 5-10% pull backs from highs.
Goog has been moving sideways but i think it has just started a cycle higher, in which it is about to make a higher low at 710-15 before moving up again to 750+
715-750 is a 5% move hence i am interested in buying at this price with reward skewed something 1.5:1 with risk.
Coming into earnings, Goog has to make at least one bull run to highs at 770 and i believe this will be the set up for the run for several reasons:
1. since april earnings lows at 687 goog has moved in an upward trend of 688-722-700-736, the next cycle i approximate to be down to 710-3 (volume traded price) then up to 750+ (previous support turned resistance).
Also the Linear regression for the on graph prices is $723, so prices below this are below this cycles average - encouraging mean reversion upwards.
2. Goog volatility correlation is in its negative cycle - the last bull cycle to 768 began with a turn from positive to negative price-volatility correlation change.
- Plus goog's volatility is at yearly lows with VXGO at 17.. Low vols is something that imo is vital for any sustained bull run, as logically, more people want to own a stock that has a greater "normalised" return and risk profile.
3. Average Volume divergence - google volume is trading below its 6 month average, lower volume characterises goog's bull runs typically, as shown in the previous bull run. Since it signifies there are fewer structural sellers that are prepared to sell the stock, thus volume drops and the price is bid up until sell side liquidity is increased sufficiently to meet a new, higher, equilibrium price.
4. *please see last 3 price bars* - these bars have been highlighted as having a "topside range skew". What is inferred by this is that the candle has more activity at the higher prices e.g. the candle traded at its highs and open more than its close and low - thus this is a bullish signal as the open high and close data stayed in the upper percentiles of the candle.
- Even the first candle in question (the first bear candle), opened and closed at apprx the median price.. this is unusual. the first bear candle after a strong bullish run, usually shows heavy open-close downside skew e.g. the price opens and then closes close to the lows (rather than in the middle of prices traded) - indicating that time period closed with the price being driven/held at the lowest possibility.
If we were to see the opposite e.g. the candles closing on the lows, this would be bearish and indicate the price is wanting to push lower, since there was no difference between the low and close.
Fundamentally i am also long google, hence why i like buying any decent pull backs - especially when they have a strong set up.
RWLK supportHas sold off 33% in last few days because of secondary offering. Seemed to put in good support at 8.00 level.
