The VIX Is Worthless by Itself. This Ratio Fixes It.
By Brandon Chapman, CMT
Hey trader,
The VIX hit nearly 28 intraday today. The S&P 500 is down more than one ATR.
Declining stocks outnumbered advancing stocks by 20 to 1 on the NYSE at the session's peak selling pressure.
Most traders look at that and see chaos.
The volatility market is telling a different story. VIX futures are in backwardation.
The 30-day weighted average of VIX futures is sitting at approximately 22.5 while the spot VIX is trading at 24.5.
That spread contains a signal that has identified market bottoms with 80% accuracy over the last 22 years.
The raw VIX number does not tell you whether volatility is high or low relative to expectations. It gives you a temperature reading with no thermometer.
You can avoid the trade setup where most traders get trapped.
The squeeze trap. It happens when a short squeeze gets started, only to evaporate. Miserably.
A gamma squeeze play can be great. The Ghost Prints Surveillance Console lit up opportunities on KSS (375% in 13 days), PLUG (206% in 5 days), and on VFC (100% in just 24 hours).
Of course you want to find these excellent opportunities.
Along the way you need to skip over the pit of despair, the trap waiting to suck you in.
👉 Check out my latest Squeeze Traps session to see the Console in action live.
Disclaimer: Neither TheoTrade or any of its officers, directors, employees, other personnel, representatives, agents or independent contractors is, in such capacities, a licensed financial adviser, registered investment adviser, registered broker-dealer or FINRA|SIPC|NFA-member firm. TheoTrade does not provide investment or financial advice or make investment recommendations. TheoTrade is not in the business of transacting trades, nor does TheoTrade agree to direct your brokerage accounts or give trading advice tailored to your particular situation. Nothing contained in our content constitutes a solicitation, recommendation, promotion, or endorsement of any particular security, other investment product, transaction or investment.Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time. Past Performance is not necessarily indicative of future results.
Post a Comment
Post a Comment