And let's not forget KO, a long time Buffet "kant miss" favorite. The rumble of euphoric hooves almost drowned out the sound of it falling over by 6% today.
The rally might turn out to be real - nobody knows the future. There are only likely possibilities, models, odds and triggers. But this I do know:you cannot have this kind of damage being done to such big names and still think that the bull market is healthy. The shorts piled on too far too fast and now the late comers got panicked out of all their profits. This is the huge advantage that has been earned by working to catch the exact bottom: I am still nicely up and am playing with OPM so there is no panic for me, only controlled retreats when it is prudent to do so. When the markets begin to go into real collapse, I will be there. For now, if the markets want to go lower then I will stop out easily and not fight the flow. But if that happens I will be watching like a barracuda ready to strike quickly when weakness sets in again. These whipsaw markets are as tiring and stressful for the bulls as they are for the bears. All of today's euphoria will soon turn to abject fear and obvious panic during the next big sell off.
Hi,
ReplyDeleteI just discovered your blog a week ago, it's refreshing to see posts with straight forward expectations and putting money where your mouth is. Trying to time long volatility positions has been brutal last 3 years (I won't touch XIV until after a prolonged period of backwardation such as 2011) but last week's spike helped me cover all losses and then some. Instead of stop losses, I sold majority of holdings close to the top and rode down 30% of my account giving back some of the gains. This shit's tricky (VIX hasn't dropped > 10% per day for three days in row, ever!)
I don't understand Elliot Waves, I typically rely on support/resistance (daily, 60min, and 10min) on S&P and VXX. Just some general questions for now...
Why use TVIX as opposed to UVXY? TVIX is an ETN vs UVXY an ETF. Why take credit risk on TVIX given it's an ETN? TVIX is also thinly traded compared to UVXY.
Your post from a few days ago alluded to significant downside in TVIX if it drops below 3.50 (the blue line). Do you think there's support around 3.10-3.15 (looking at the 60min chart).
Keep up the good work and best of luck!
Hi TJ,
ReplyDeleteWelcome to the blog.
Why use TVIX as opposed to UVXY?
- Good question. I was hoping that the additional risk would get handicapped into the swings and my stated goal was to find the most leveraged liquid anti-market fund to trade. While TVIX has been fine in terms of liquidity, generally one penny spreads, it has not kept up with UVXY during the recent swings. From the recent bottom to the recent top, UVXY (range 22.20-56.36) actually outperformed by 10% to the upside relative to TVIX (2.50-6.15) over the same time period.
Your post from a few days ago alluded to significant downside in TVIX if it drops below 3.50 (the blue line). Do you think there's support around 3.10-3.15 (looking at the 60min chart).
Significant TVIX downside is indeed possible but not required. For example, look at recent post on GE and then Intel. The Intel count suggests that selling should begin again very soon and even much stronger than we just had since Sept 19th. The GE count hopes that the current 5 wave move up will result in a short stroke 5th (AKA failed 5th) but there is no guarantee.
As for support points I mainly rely on the wave count to guide me (as in 90%). I don't see any legacy TA support on TVIX and in fact the inverse H+S that broke down would argue for more selling.
Now that the "we are retracing 4 of 3" model is dead, several things could happen including a much lower pullback, a very deep 2nd wave vee (assumes the recent run to >$6 was wave 1 up). But if you look at recent posts on things like Intel, etc. a very bearish setup is present right now and so the current level of pullback in TVIX (which is now at the 78.6% fib) might find support. Whatever happens, I will stop out if we fall below yesterday's closing low after having climbed above it (I hope) at tomorrow's open.