🐺Navigating the Chaos: Is Your Strategy Ready for This Market?

Hey there! My name is Jordan and I write about trading for the WOLF Financial newsletter. If you are looking for more trading tips and tricks I guarantee you’ll enjoy my content on 𝕏, @AceTheKidTA. Thanks for reading!

This service is for general informational and educational purposes only and is not intended to constitute legal, tax, accounting, or investment advice. These are my opinions and observations only. I am not a financial advisor.

Last week in the market was absolutely crazy with the S&P 500 gaining .02% on the week and the $VIX spiking to $65.73 from $20.52.

This brought a ton of volatility into the market making it very stressful for new traders, especially if you are trying to scalp options.

This is a great time to observe the price action how it changes and how the traders you follow adapt to the market conditions.

If you run Fibs on $VIX from all-time highs to all-time lows you can see we got rejection off of the golden Fib retracement at $65.66.

It has pulled back to $20.36 which is 69.02% from the recent highs.

What is $VIX?

$VIX is the volatility index for the S&P 500, so this illustrates how volatile the markets are. This gives us an idea of the trading environment we are in.

You can also track $UVXY which is the $VIX Short-Term Futures ETF.

How Can $VIX Benefit Your Trading?

Generally when $VIX is moving up $SPY is moving down and vice versa, so this can be a good extra piece of confluence for your trading.

If you see the $VIX trending in one direction and $SPY sitting back and waiting to make a move, it can give you a good idea of where things are headed.

We track $VIX daily in our Twitter Spaces and use it to our advantage as much as possible.

Based on the price of $VIX, the trading environment can be different.

Lately, a $VIX over $20 has brought a much more volatile environment meaning candlesticks are very back and forth and there is a lot of “whipsaw price action.”

A $VIX under $20 is usually more smooth and slower price action.

When $VIX is spiking it’s generally a good idea to size down a bit since the market can be extremely volatile.

On the flip side, it can bring a ton of opportunity for the short-term scalpers due to the big moves that can occur.

I hope this helped you guys understand a bit more about the $VIX and how to use it to further your trading!

Thanks for reading.

-Jordan

@AceTheKidTA