How I'm Trading the Volatility: Live trades (Jan)

I figured everyone was tired of seeing red on their screen so I went ahead and liquidated SQQQ at 20.01 at 12:44. Seems to have done the trick....hope you all enjoy the ramp... ;) ;)

KC, I've been studying the relationship between VIX and these four stocks. It seems although these ETFs track VIX, the overall volume tracks interest in the ETF itself. i.e. interest in playing overall market volatility.

There was a stretch there from 11:30 to 12:45 where SQQQ was almost completely decoupled from VIX. My theory is that during this whole day, and particularly during that time period, traders who would normally be in inverse ETFs were out "in the market" buying and selling actual stocks, options, futures, etc based on their knowledge or theory of events, which they thought would give them higher returns in the short term. I think as time goes on a lot of these plays, especially based on all these "tips" floating around, will inevitably go south, leading to a retreat into ETFs and other "general market" type plays.

So it might take a day or two for that to manifest, but I see a positive sign in the current slow rise we're seeing. After the "decoupling" period ended, it looked like there was actually a slight surge of people back into SQQQ, and it then began tracking VIX closely again. After the initial collapse, volatility has been on a steady rise all day.
 
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daveblanchard said:
I figured everyone was tired of seeing red on their screen so I went ahead and liquidated SQQQ at 20.01 at 12:44. Seems to have done the trick....hope you all enjoy the ramp... ;) ;)

KC, I've been studying the relationship between VIX and these four stocks. It seems although these ETFs track VIX, the overall volume tracks interest in the ETF itself. i.e. interest in playing overall market volatility.

There was a stretch there from 11:30 to 12:45 where SQQQ was almost completely decoupled from VIX. My theory is that during this whole day, and particularly during that time period, traders who would normally be in inverse ETFs were out "in the market" buying and selling actual stocks, options, futures, etc based on their knowledge or theory of events, which they thought would give them higher returns in the short term. I think as time goes on a lot of these plays, especially based on all these "tips" floating around, will inevitably go south, leading to a retreat into ETFs and other "general market" type plays.

So it might take a day or two for that to manifest, but I see a positive sign in the current slow rise we're seeing. After the "decoupling" period ended, it looked like there was actually a slight surge of people back into SQQQ, and it then began tracking VIX closely again. After the initial collapse, volatility has been on a steady rise all day.
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Smart obversations, agree following VIX key... sharp drop today, may pivot soon. SQQQ getting near 52wk low.

I'm checking re eod bounces especially UVXY SQQQ today, will buy if they spike up.
 
KCalhoun said:
Smart obversations, agree following VIX key... sharp drop today, may pivot soon. SQQQ getting near 52wk low.

I'm checking re eod bounces especially UVXY SQQQ today, will buy if they spike up.
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SQQQ did bounce@ last/eod.
Started scale in spxs/late.
SPY isn't real weak, even though OCT/SPY was.Took profits on QQQ;got back in some more tech etfs. Looked @ERY + IBUY/not going up enough for me/LOL,lately…………………………………………….
 
Pretty much played out on what I said 8 days ago when we were 300 pts lower . As I said all were looking for a crash .When I see that kind of anxiety and the market going down zig zag I always take the opposite trade as it tells me people are loading the short side . They suck shorts in for rocket fuel . Shorts are conditioned to cover if somebody shouts boo . The horror of 11 yrs of devastation holding shorts is in their mind every second .
 
Looks like the market is going to rally again today! I'll probably have to bail out on the first good peak and swim to the surface, catch my breath and wait for another good entry point. Should have done that yesterday on the first bump.
 
daveblanchard said:
Looks like the market is going to rally again today! I'll probably have to bail out on the first good peak and swim to the surface, catch my breath and wait for another good entry point. Should have done that yesterday on the first bump.
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Good strategy . Live to play another . Nothing wrong with shorting but always have predetermined stops in . If you lose your capital it’s game over . A friend of mine was determined to catch the “crash “ the last week . I begged him not to short . He couldn’t control his addiction . He got margined out right near the highs at 3480 yesterday . People must learn on their own . They must feel the pain of touching the hot stove till their finger is bleeding to understand . Till you respect the power of the mkt you can never win consistently.
 
No doubt. And with 3x leverage it's like playing with a flamethrower! :O

I bailed on SQQQ first thing after open and jumped into TQQQ for a time, but didn't see strong action there. After a short time it showed signs of falling off, whereas in SQQQ it seemed to be wanting to rise despite VIX not necessarily indicating a rise at that moment. So I climbed back aboard which, at this moment at least, seems to have a reasonable move.

I am absolutely struggling over here, fighting this Fidelity web site. Seems like every time I need to hurry and made a trade, or cancel/change an order, right then the site logs me out, or the internet drops out for a second right while the site is doing something thus freezing it, and requiring a several MINUTE long reload. Extremely frustrating.

Any of you have experience with Alpaca? Thinking of trading with them in the future, so I can have direct API access. I'm a computer programmer so I can write my own script to continuously fetch quotes, graph them, and execute trades very quickly.
 
There's a lot more of that VIX decoupling going on today. If my hypothesis is correct then there seems to be a lot of people moving in and out of SQQQ to other plays. Sometimes SQQQ was surging while VIX was falling, or vice versa. The overall trend looks to be up. It looks like overall bear sentiment may be growing, albeit slowly.
 
hafez50 said:
Pretty much played out on what I said 8 days ago when we were 300 pts lower . As I said all were looking for a crash .When I see that kind of anxiety and the market going down zig zag I always take the opposite trade as it tells me people are loading the short side . They suck shorts in for rocket fuel . Shorts are conditioned to cover if somebody shouts boo . The horror of 11 yrs of devastation holding shorts is in their mind every second .
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Good points,Ha5055.
Some, however start a scale in small;
with 2 or 3 planned in buys, for example in SPXS/spxu, not really a horror involved.
OF course, having some UPRO+many years of SPY charts, may help prevent horror.
Risking a certain % of long etf profits, on inverse scale ins may help...……………………………………………………………………………………….Easier to lose profits in inverse, sometimes.
 
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