New Highs, A Stubborn VIX, And A Very Nervous Bull

Other than that BOFF BOOM move we are seeing, which looks like it may get to Mars before Elon does, the VIX is staying elevated and also pumping a little higher.

Now. S&P up, VIX down. S&P down, VIX up. That is how it is supposed to go.

Which makes me think that this could be a bull trap. Blow off top thingy.

I am a very nervous bull.

Market Snapshot

New all time highs on ES, YM and RTY. NazQuack is climbing back toward its own. Gold is having the best morning on the grid.

• ES (SPX): 7,787.50 / +0.17% / new all time highs, full read below

• YM (Uncle Dow): 54,404 / +0.06% / new all time highs as well

• NQ (NazQuack): 29,851.25 / climbing back toward its highs

• RTY (Uncle Russ): 3,050.00 / +0.07% / new all time highs, full read below

• VIX: 16.17 / -1.94% / elevated, and that is the problem

• GC (Gold): 4,215.60 / +1.97% / biggest mover on the grid, no read today

• CL (Crude): 76.25 / +1.48% / no read today

• BTC: 64,083.06 / grinding, so I’m on ETH/BTC again, below

SPX: The Bull Keeps Bulling, Without Me

The SPX bull swing keeps bulling, and I am not afraid to say that it is doing it without me.

The clear bear Tag n Turn sidestep worked out well.

So I am playing the bull moves just intraday.

Keeps bulling. Without me. Intraday only.

Uncle Russ: A Fresh Setup With A Warning On It

RUT is looking similar to SPX. Bull extreme readings, and a fresh Tag n Turn with a warning to avoid it, because it is low quality.

And the MACD-v extreme readings are showing a continuation reading.

Low quality. Continuation, not reversal.

Crypto: ETH/BTC, Spitting Distance

The ETH/BTC trade is still swinging lower, so nothing to do here other than wait it out.

We are literally within spitting distance of target.

From here it is the assessment for bulls, or whether there will be a break lower for the bigger swing potential.

Nothing to do. Wait it out.

Premium Poppers: A Simpler Transformer, And Both Tents Landed

Of course the intraday moves continue to titillate. Standard breaks on the software, great scoring, and a lovely solid trending day. A rare event for sure, but nice all the same.

SPX graded PLUS (+3) at 1.5x size. RUT graded NORMAL (+2) at 1x. Both bull, both a clean 6 out of 6 on the Lazy stack.

I was also playing with a new, simpler way of playing the transformer trades, similar to the batman setup. As you can see from the P&L curves, it is all green.

And then a surprise bonus. The strong trending day also landed the profit tents on both SPX and RUT, for some extra profits on top.

$440 on SPX. $413 on RUT.

Both tents landed. All green.

The Community Smashed It Again

And even with some oopsie daisy button pushing, the profits are still coming good.

Don closed the SPX Bull BO at 50%, got distracted and missed the RUT one, then came back later and took the RUT LP Bull BO at 50% as well. Eddy closed the SPX Bull BO at 50% and then took the BO3 at 50% on top. ellisiiip took RUT at 50% for the win. James took the SPX Bull pulse at 50%, then got sidetracked and missed the LP opportunities. Annoying, in his own words.

Chris got the standard OTM 1st BO on both SPX and RUT, and was honest about hesitating on the 3rd BO entry. His words afterwards: in hindsight the 3rd BO entries were spot on, and he did not have the you know whats to pull the trigger.

Richard had the day of it. SPX BO1 at 7655 for $55c, transformed. RUT BO1 at 3000 for $55c, transformed. Then SPX BO3 at 7680 for $60c, transformed as well. Which left him with three profit tents, two on SPX and one on RUT. His words at the time: so I am really, really hoping it retraces to one of them by the end of the day.

And Mary locked in a tiny profit on SPX after setting up a transformer trade with the wrong strikes. We got it sorted between us, and she took a losing trade to a locked in profit. Her words: that bull market is crazy today. Congrats everyone.

Well done team. Let’s see what today brings us.

Fun Fact

Since I am grumbling about the VIX going the wrong way, here is what the data actually says.

The correlation between the S&P and the VIX sits at about minus 0.80, and it has been stable there for most of the last twenty years. So the rule of thumb is real. They do move in opposite directions.

But not always. They move in the same direction roughly one day in five. The exact figure is 22.2% across the whole VIX history from 1990, and 18.9% looking at 2004 onwards.

So the two moving together is not exotic. It happens about once a week.

What makes it worth a second look is not that it happened. It is where it happened. Once a week is noise. Once a week at new all time highs is a question.

Source: Macroption, VIX and S&P500 in the Same Direction.

Trade well,

T2 Markets

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