#Market Entertaining to watch…
After hitting a 24-year low, VIX now up +18%
After hitting an all time high, Nasdaq now down over 3%
After hitting all time hign, SPX down over half a percent… interesting but not the +3% of NDX
After hitting all-time high, RUT only now went negative.
This is my last day of traveling so I do not have time to post statistics… you can see past posts by clicking on this: #VIXIndicator
The signal we are now building, VIX closes below the Fib 78.3% retracement, is a very reliable sign that the SPX will continue higher in the coming days. There have been over two dozen occurrences of this since 1999, and in all but one there was no significant pullback for multiple days or weeks.
I am stopping my self out of many call spreads and selling put spreads, some of the them ATM or NTM. I’ll post more stats on this later this week.
Different market affects today with respect to volatility. Spot $VIX and $VVIX took an additional step higher today, but $VXX, $UVXY, $SVXY really not responding. Saw a similar thing after Brexit, implies to me that there are traders selling volatility today.
Interesting that the Russel 2000 has been positive most of the day and the mid caps are only down $0.03 ($VO). One of the folks on CNBC today mentioned that the VIX equivalent in Europe is in the 20’s and that traders have gone short that volatility and are buying volatility in the US as a hedge. Might explain what drove us into front month contango while the rest of the curve really has not been affected, looks normal and orderly.
#Market We leave tomorrow for a 2-week trip to Boston, New York City, and Milwaukee. I plan to meet up with Bistro follower Ralph in NYC… let me know if anyone would like to connect in any of those cities.
And as most trading website moderators claim, when I travel the market seems to be volatile… sure enough, we got a Downside Warning the day before I leave. So I guess if nothing else worries you, consider my travel plans the market indicator!
#VIXIndicator We just got a second signal this morning so we are now under a Downside Warning for the #Market. Expect more volatility and a downward bias. Be careful selling put spreads, or avoid them. Consider call spreads on rallies and even long put positions.
I will post more details on the warning later today.
Looks like someone launched a sell program @ 10:30 Central.