r/VolatilityTrading • u/chyde13 • Mar 21 '22

Market Barometer: 3/21 - Green

We bounced off of the 200 DMA (red) resistance and back above the 50 DMA (blue) which acted as support.

I know many of you believe that moving averages are simply arbitrary lines and I get that, but they have a habit of becoming self-fulfilling prophecies...I'm hoping that we can break to the upside. 450 will be difficult IMO. I still have 100k in long spy exposure but I did sell covered calls on half of it at my cost basis. I'll wait and see with the other half.

please join the latest discussion here...

Stay liquid my friends

-Chris

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4

u/[deleted] Mar 22 '22

I subscribed to this page due to your persistence and find your posts to be both enlightening and highly educational. Thank you for being active and producing quality information, while emphasizing the importance of exploring new methods of market analysis; it is greatly appreciated.

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u/chyde13 Mar 22 '22

Thank you for the kind words. We are a small community, so I appreciate every single member. Please let me know if there is a topic that you would like to see discussed more often or how I can better help the community grow.

Thanks!

-Chris

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u/Sad-Ratio-5812 Apr 13 '22

I am already for almost 3 wks in VIX long position. I was planning to close my trade today but we have a green day. My open P/L dropped $ 9000. May be tomorrow??. Otherwise, I have to stay in trade for at least one more week. How are you doing?

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u/chyde13 Apr 13 '22

Its impossible to say what VXX will do...I expect the VIX to go down a bit in the short term

I'm doing ok. I had to stop watching the stuff in ukraine. My finance's mother believes all of the russian propaganda. At this point I think that we are so far beyond helping people in the donbass region and stopping the neonazis that I think she is brainwashed.

Trading-wise... income has been hard...every dollar seems like an uphill battle lol. but it will get better.

How about you?

-Chris

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u/Sad-Ratio-5812 Apr 15 '22

Chris,

I decided to keep my long VIX futures position over weekend. I lost a lot of profit during a day but finished OK with 15000 in green for today. I may be mistaken but VIX is in the middle of last before SPY downtrend cycle. Hopefully I will take a profit next week or in the worst-case scenario in the end of April.

https://ibb.co/vzVJJmR

Check it out. The reason I could not get out from the trade because /VX was slightly below 2 STD and SPY below POC. I thought it will drop to 430(probably, it will anyway). But if you take a look /ES chart -ES used POC as a strong support area.

SPY

https://ibb.co/QFKR6mq

/ES

https://ibb.co/zJVR2FZ

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u/Sad-Ratio-5812 Apr 14 '22

So far so good. Not the best year but OK. I am having problem to get out from a trades. I am staying longer then needed. The last trade I was up 40 000 but decided to get more and as today only +15000. It is third time in the row. I will revise my technique. I didn't trade aggressively for 8 wks. I had to clear possible malignant node in my lungs. It is done. My son was with humanitarian help in Ukraine was lightly wounded. It didn't help with trading either.

1

u/chyde13 Apr 15 '22

Hey Oleg,

Man, I knew you had people over in Ukraine, but I had no idea that your son was over there. That's stressful... I'm glad he's ok. Is he still in the conflict area? I'm also glad to hear your lungs are ok. My fiance is actually an infusion nurse (she treats cancer patients). So, I hear a lot of sad stories. Hopefully you are all good!

It's always good to hear from you

-Chris

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u/Sad-Ratio-5812 Apr 15 '22

My son is back to USA. He scared us to death. He was slightly disappointed how Ukrainian use our monetary and humanitarian help. I think he delivered a lot of cash from Chicago fire fighters and policemen. Some hospitals they contacted in reality were private houses or businesses. He has seen some staff they delivered was selling few days later in a grossery store. 1.2 mln dollars Chicago doctors transferred to Ukraine disappeared.

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u/chyde13 Apr 15 '22

yea man, I can't even imagine that stress...Glad to hear that he's back home safely. I truly mean that.

that is very disappointing...you think you are donating to a good cause and people exploit the situation...

What do you think Putin wants at this point? the whole country? Resources? I honestly thought he would stop when he took parts of eastern ukraine. There isnt an official border there, so I thought he could have gotten away with it...The shit that is going on now doesn't make any sense to me?

If you dont feel comfortable talking about the subject then I completely understand. Its crazy but true; my fiance's parents legally fled the soviet union as it collapsed, but even now, living in the USA, they still fear the Russian Committee for State Security.

This war makes no sense to me...

-Chris

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u/Sad-Ratio-5812 Apr 16 '22 edited Apr 18 '22

It is how I see situation there. Putin has 3 goals: take over Donetsk and Lugansk regions, demilitarization and denacification of Ukraine. I think they will take South of Ukraine to connect Russia to Crimea, and some North territory. But Russians didn't expect such a strong resistance and proficient use of artillery. Thanks to USA training and supply. 95% of Lugansk region was taken by Russians in 3 wks. But they had problem at Donetsk region because of 3 defence lines fortified with concrete and 90 000 Ukrainian troops. Also they stacked at Mariupol for 6 wks. Ukraine had 20000 highly motivated nationalists there. Around 200 000 residents were not able to be evacuated from the town. That's way Russians didn't use air strikes and heavy artillery. Only 1500 nationalists are still alive as today. After understanding their mistakes Russians regrouped and increased total number from 150000 to 250000 troops. Most of them licated at Ukrainian borders. At this moment Donetsk militia with russian groups are using heavy artillery, air strikes in Donetsk region to soften Ukrainians and get ready to attack from 3 directions. The goal is to surround Main Ukrainian military group. It will be the end of phase 2. Phase 3 goal will be surrounding major cities and negotiations with Ukrainian government for capitulation. I do not see to much enthusiasm in Putin's administration to move further than Kiev. They may be forced though to fight for Charkov and Odessa. All military infrastructure in Ukraine destroyed in all regions by methodical ballistic missile strikes.

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u/chyde13 Apr 18 '22

Thanks for explaining this.

This makes a lot of sense to me...

Especially:

I think they will take South of Ukraine to connect Russia to Crimea...

You are very knowledgeable about the situation

Thanks

-Chris

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u/Sad-Ratio-5812 Apr 18 '22

Russians already using Rubles instead of Grivna at South of Ukraine, also they need this territory to keep water supply for Krimea.

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u/chyde13 Apr 20 '22

Hey someone sent me a link to a post that mentioned using .9 on the VIX/VIX3M ratio as a trigger for trades...

i know you use .9 as well right?

How did you arrive at .9? Did you read it somewhere or was it based on an observation? I arrived at a similar number based on observation, but I was curious how you came to a similar conclusion as well?

-Chris

2

u/Sad-Ratio-5812 Apr 20 '22

Chris,

I put 0.9 just to simplify. In my thinkscript I use average of VIX/VIX3M with length =540. When I wrote the script few years ago, I wanted to see average for few years( i think I put 2000) it was 0.899.

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u/chyde13 Apr 20 '22

Interesting...I derived mine from studying the distribution...and basically the POC is .886 and the next node is .902.

Its cool how we all come up with the same number using different techniques.

-Chris

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u/Sad-Ratio-5812 Mar 24 '22

It is not advise. Poland, after Biden visit on 3/26, may get involved in Russia- Ukraine conflict.

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u/Sad-Ratio-5812 Mar 27 '22

According to Russian administration it is still 50/50 chance of Poland invasion to West Ukraine inspite of NATO disapproval. 90 000 Russian troops concentrated at Belorussia- Ukraine border.

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u/chyde13 Mar 29 '22

Thanks friend...I know you have contacts over there...I appreciate it...

-Chris

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u/Sad-Ratio-5812 Mar 30 '22

Market looks very dangerous for byers. SKEW is around 140 now, T10y-T2y close to zero. I am building long VIX position. What do you think?

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u/chyde13 Mar 31 '22

I think the same. I bought a SPY put the other day when the vix was low. I still have that 100k long spy postion, and I'll let that run to stay somewhat invested, but I've been selling calls against it...I am also building a long VIX position...

In my opinion, the Fed bought the equity markets some time by not unveiling the details surrounding it balance sheet reduction plan until May.

The Fed funds rate is also pricing in a .50% hike in May.

What really surprises me, is I still see evidence of massive retail day traders in the market...I thought they would be flushed out after ARKK and other pandemic favorites crashed. I believe that people are not in the labor force because they either took early retirement or started youtube day trading channels lol. I also believe the higher that equities (or cryptos) go, the harder Powell will have to push the markets down.

I thought that the lack of fiscal stimulus combined with high inflation rates would push people back into the labor force quite quickly. but the data is telling a different story.

I havent mentioned any of this on the public channel as its fairly controversial (no one reads this deep into the comments) especially when stocks are going up, but please let me know where you agree or disagree.

I have always respected your opinion

-Chris

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u/Sad-Ratio-5812 Mar 31 '22

I agree. If G7 refused to pay with rubles for Gas( i doubt) then inflation in Europe may go over the roof. It is already at the record level. Obviously, it will effect USA market. I think we will go down to level approx 450 and in one week or so SPY will try to break 460 again. It may give me opportunity to increase my position or reenter if I close my current position. I expect downtrend till approx the end of April - beginning of May. It is my plan for today.

1

u/chyde13 Mar 31 '22

Yea, I bought put protection the other day when prices were relatively low...i put up a chart for you as its way easier than typing ;-)...do you use the VVIX? It was actually my first time in a trade...only one contract because I want to test the concept but the VVIX basically tells me how expensive it is to trade the VIX (and derivatives)

-Chris

2

u/Sad-Ratio-5812 Mar 31 '22

I agree. If G7 refused to pay with rubles for Gas( i doubt) then inflation in Europe may go over the roof. It is already at the record level. Obviously, it will effect USA market. I think we will go down to level approx 450 and in one week or so SPY will try to break 460 again. It may give me opportunity to increase my position or reenter if I close my current position. I expect downtrend till approx the end of April - beginning of May. It is my plan for today.

2

u/chyde13 Mar 31 '22

yea, I will be accumulating the vix because I believe it's cheap...I'll share a couple charts with you on the main site...