Downside Warning canceled

#VIXIndicator The Downside Warning is officially canceled as the SPX notched a new all-time high. However, this high was driven by a tweet that we humans understand, based on recent history, really doesn’t mean anything. The algos respond and drive us higher. If no trade deal is reached by Sunday, or there’s no agreement to delay the tariffs, we could re-enter a Downside Warning quickly and easily.

My opinion: I don’t think a trade deal will be reached until after the election. However, I do think the tariffs will be delayed. I don’t know how that will affect the markets, but Monday we could be anywhere.

Another Downside bust

#VIXIndicator Well, that’s two Downside Warnings in a row that turned out to be only one-day warnings for a brief intraday low, then rocket back to the skies. I’m going to keep tracking them, but include a notice that they have not always been working. Meanwhile, I will research the history to determine if there are any concurrent indicators that can distinguish between accurate and inaccurate warnings.

For 2019, the Warning on 4/5 was good; 8/1 was okay; but 10/2 and 12/2 were head fakes.

Downside Warning in effect

#VIXIndicator The $VIX close today was 14.91, which is over 25% higher than Wednesday’s close, triggering a Downside Warning. Based on past behavior, the chance for a further drop in the coming days or weeks is high. That said, the last one (on Oct 2nd) didn’t pan out, with only a slightly lower intraday low the next day, before cruising into record highs after that.

Upside Warning canceled

#VIXIndicator The intraday $VIX spike has canceled the Upside Warning, which had been in effect since Oct 16th.

VIX collapsing

#VIXindicator The Upside Warning coming through this time, with $VIX hitting lowest level since July 29th. $SPX came within .59 of all-time high earlier today.

Upside Warning

#VIXindicator An inside day on the VIX chart is the third close below 15.05 in a row, meaning an Upside Warning is in effect. Look for higher prices in the coming days. I’m proceeding cautiously after last month’s headfake. I only have one bullish trade (put spread sold this morning).

Expiring today: $SPX Oct 16th 2945/2955-3030/3040 condors sold yesterday for .45.

SPX Monday

#SPX1dte Sold $SPX Oct 21st 2975/2950 put spreads for 4.90. IV: 11.44%, SPX 2990. Bullish positioning following both trend and #VIXindicator.