VIX Down Bubble

Despite equities being down for the day USS VIX seems rigged for dive and pointed five degrees down bubble. OPEX week or not – something is going to have to give here – so be cautious and if in doubt reduce your exposure.

As you can see volatility is approaching lows not seen since last March – I take it you all remember what happened next. However we should also keep in mind that we remained locked below VIX 15  for quite a while until gravity set in on the equities side.

Case in point – here’s a 5-min left chart of the VIX:SPX ratio against the spoos. As suggested over the weekend shenanigans like this may be harbingers of a little short squeeze looming on the horizon.

A few more goodies for my intrepid subs below – please step into my lair:
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Soybean – right at the NLBL and its 25-day SMA. Should be good for support so we are long. If we breach then flipping this trade is permissible.

ZN – 10-year treasury futures: Nice inside day – may change by the end of the session but if it stays in place then you know what to do. FWIW – I would prefer the downside here as that NLBL above may contain a breach higher.

Ole bucky has been braving its NLSL so far – long here with a stop below. If it breached then the next level of support is that 100-day SMA. If that one gives – well, then I may just have to start charging you rats in Euros 😉

NZD/USD sitting on support. Entry is tricky here – that 25-day SMA is near but far enough away that we actually may test it. I would prefer to grab it at the SMA but maybe it’s worth a small entry here and a retry near the SMA. Both entries would be stopped out below the SMA.

EUR/AUD has been failing each Net-Line in the past few months. Although this is starting to look like a floor I want to be short here with a stop above. But if we push above then we have a long signal.

CAD/JPY seems to start its own 100-day SMA sprint. I know this is annoying but it’s wise to keep an eye and let the SMA be your directional guide. If you were long and your stop hasn’t been hit yet – fine. But keep in mind that the SMA is dropping and that means you need to be disciplined with your stop. Anyway, I didn’t point it out but we may be getting a sign here as we may close an inside candle today. And you know what to do tomorrow then.

Cheers,