Downside Warning

#VIXIndicator A Downside Warning is now in effect… look for continued drop, at least in the short term.

VIX Indicator

#VIXIndicator, needless to say, the minor upside warning was canceled this morning with a $VIX high of 18.80 (we only needed 16.09). Any close at 16.09 or higher will mean a Downside Warning.

Minor Upside Warning

#VIXIndicator fired this at the close. Last one we got was on March 13th, and it was good for a 1.75% move up from that day’s close to intraday high 6 days later, before we stalled and pulled back a little.

Upside Warning probably reaffirmed

#VIXIndicator With a $VIX close at 13.54 or lower today, a”minor” upside warning will fire, reaffirming market’s upside bias in the absence of any significant pullback materializing. Should mean another leg higher next week.

SPX condor roll

#SPX1dte #VIXIndicator No upside warning today so I’m selling both sides:

Sold $SPX April 12th 2800/2825-2910/2935 condors for 6.30 (IV 11.82%, SPX 2875)

Upside Warning canceled

#VIXIndicator It was only a “minor” one so not surprising that it didn’t last long or go far… VIX spiked today to reach 25% higher than yesterday’s close, so that cancels the minor upside warning. A close at 17.04 or higher would be a Downside Warning.

“Minor” upside warning

#VIXIndicator Usually the Upside Warning is canceled when we get a Downside Warning. But sometimes, like last Monday, the UpW is canceled by an intraday spike on the $VIX, with no DW taking effect. Usually when that happens, the DW comes within the next few days.

But sometimes, the VIX retreats enough to fire a “minor” upside warning… which is measured on the Fib levels from the recent intraday spike. So three closes below the 78.6% line would fire this “minor” signal.

That will happen today provided VIX closes below 14.44.

This has happened only 6 times since 2000. Below is a chart with the performance of SPX in the days after each “mUpW”, ending at the next VIX spike or DW. You can see that it is mostly positive; even the longest one that goes negative spiked pretty high before rolling over.

Screen Shot 2019-03-13 at 8.01.48 AM