Monday, October 20, 2014

Vix at do-or-die level, with extensive footnoting


You'll see I changed my Bollinger period to 14 for this chart. That's because 14 gives me a Bollinger mean that seems* to govern the $VIX uptrend.

Cuz if you look closely, the close on $VIX pullbacks ends at the Bollinger(14) mean on three separate occasions.

If the $VIX pop is over, $VIX needs to close at less than 19.6. Prefarably a fair bit less.

I'm kind of worried right now because index ETF volume seems to really have dried up. Anyone who wants to sell into this can really bitch-slap the market. Then again it's not like I can see the book from minute to minute or anything.

Also you gotta wonder about the Pimco selling high-yield in odd-numbered weeks thing that I mentioned in the previous post.

We'll see. QQQ is a hair's breadth away from Friday's high of $93.85 right now. If it pops above, things will look better to me. Welp... just popped above as I typed that. Woops... just popped back down as I wrote that.

* - it's not magic. But it seems** to work, sometimes, until it doesn't.

** - There's actually a rational mathematical reason to watch these things. The more volatile your market, the shorter-period the governing EMA will be - that's a mathematical truism. So when your market in something cools down, you'll see it being governed by longer and longer period EMAs until it dissolves into a random walk waiting for the next external torque to set off a new move. Or so it seems.***

*** - no really, all I'm saying is that if $VIX doesn't drop below the mean, it'll go back above the mean. That seems* to be a pretty ironclad prediction, no? And going back above the mean means $VIX going up, which you don't want if you're short $VIX. So really all I'm doing is elementary momo, not TA.

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