.sigma's 6 Degrees of Freedom (Short Synthetic Vol) 999 Journal

.sigma

.sigma

Hello friends,

Its 2020 and the markets are active. $VIX tapped 19.99. Its not 12 guys. Interesting. All of the other volatility index's have popped as well, oil vol is bid as well.

I'm starting a journal to collet my thoughts, trades, ideas, and share knowledge and build a foundation with fellowship.

I figured today was a good day to open a thread. A few things worth noting.

$SPX is down -58.14 (-1.77%)
$NDX is down -144.58 (-1.58%)

The true range in SPX was 67.65. Which is the largest we've seen in 4-5 months.

Another tell-tale, VOLUME. Look at the liquidity that poured into the markets this week. Literally every product I look at has massive volume statistics for this week. Look also at the vol-etn/etf space and UltraPro products like VXX, UVXY, SVXY, SPXU, SDOW... all have a ton of liquidity flowing through.

What does this mean? Who the fuck knows, but keeping a keen eye on the numbers gives one insight on where the big banks are flooding order flows.

I will be trading a myriad of ways. Mostly I will trade cheap stock that has declined for "X" period and scoop up shares/long calls at price levels I deem being the bottom, hence I am fading down moves looking for short squeezes and pops. This is why I titled the thread (Short Synthetic Vol). I am buying low (spot), which spot is low, vol is usually high. So I'm betting that I picked the bottom and price will rise.. thus vol will decrease. Similar to how mean reversion premium selling strategies have the same P/L structure as long equity. Anyway I'm in these type of trades from a day to weeks, depends.

I will also be dabbling in SPX verticals, mainly butterfly spreads. This idea has intrigued me since I started reading these forums. Butterfly's are a special animal and I see the opportunity they provide if traded correctly of course. I might put on calendars as well. I will always define my risk, no naked positions as I don't have the capital to do that.

I'll be talking about many concepts related to trading here. Currently I am learning the ACD method introduced by Mark Fischer. So I'll be talking ACD a lot in the future as well.
Please chime in and lets discuss markets and trading and all build our knowledge in 2020. Looking forward to this year. Cheers!
 
I find it interesting that SPX topped at exactly 3337.77

333777

two perfect repdigits.

and what was the bottom in 09? 666. Very interesting if this becomes the preliminary top for awhile.

I still need to do my weekend analysis but it seems we are going rangebound/down for the next week or two at least. Who knows. These are just tidbits I’m noting from my thoughts.
 
.sigma said:
and what was the bottom in 09? 666. Very interesting if this becomes the preliminary top for awhile.

I still need to do my weekend analysis but it seems we are going rangebound/down for the next week or two at least. Who knows. These are just tidbits I’m noting from my thoughts.
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Humans are exceptionally good at finding patterns when there are none. We are so good at finding patterns where there are none camouflage fools our brains into thinking people are plants! Be very careful falling into this trap.
 
gaussian said:
Humans are exceptionally good at finding patterns when there are none. We are so good at finding patterns where there are none camouflage fools our brains into thinking people are plants! Be very careful falling into this trap.
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I totally agree with you gauss, my mind has also been known to play tricks on me but this occurs to all humans, illusory.

Regardless of patterns you can’t deny the price points the market deems significant. 666 was the low and 3337.77 is the high. It’s just cool to note.
 
minmike said:
There was a bunch of ACD enthusiasts here years ago. After trying it for awhile, I believe they all dumped it.
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how could you make a statement like this? How do u know they dumped it?
 
minmike said:
There was a bunch of ACD enthusiasts here years ago. After trying it for awhile, I believe they all dumped it.
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Lots of people still use it, the thread just isn't active since Mav left. It generally provides a pretty good 3 day price forecast barring news events and Trump tweets.
 
deltastrike said:
Lots of people still use it, the thread just isn't active since Mav left. It generally provides a pretty good 3 day price forecast barring news events and Trump tweets.
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whered you get this 3 number from? ACD can be applied to any time frame dude
 
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