Day Trading Strategies & The $VIX

Hey everyone, welcome back. Hope everyone had a safe and fun holiday weekend!

$VIX Performance

Listen, you know we told you the title of this weekend’s day trading video was ‘Watch the $VIX’. Sure enough we got down to those seven year low closes and then BAM, nice little pop today. Well, when the $VIX goes up so does my trading so Ryan and I were firing off a lot of trading this morning in the Trading Room which was great for people to watch. Doesn’t hurt to make money too right? With that being said, that was great stuff this morning, now let’s take a look, this was a nice start, a nice little gap in the $VIX. I’d like to see some follow through as you can imagine, I’d like to see continuation. We have a lot more room with $VIX at these low levels. What I don’t want to see is it stall right back out and drift back down here per say, I mean that’s not the end of the world but as you can imagine the more the $VIX goes up the more my trading goes up. Watching Ryan and I blast out trade after trade is always a lot more fun when we have the $VIX spiking.

Euro

Great stuff there. As we look at the Euro this morning, we avoided the Euro because we got down to my magic 1.35 80 level again just like we did over here and we held that. We have to get through my 80/20 rule, in this case 1.35 80 before we go ahead and get too awful excited about a trade there.
As far as Gold and day trading, guess what? We’re still looking at that 13 20 level that I shared with you before, as well 13 20 we’re right there we’re just a few ticks off that now. We tried to push through, we did not get two consecutive solid bars up, we pulled back and now we’re just stuck there. So we didn’t get a push up, pull back and then start to take back off again that’s something I’m looking for to get real excited about the long side trades there.

Crude Oil right now was not the favorite. It was kind of holding daily support here today and that was nowhere near as exciting as those super awesome Stock Index Futures.

Stock Index Futures Talk

As we look at the Stock Index Futures, it was all about the 3 to the 1 when you walked in this morning. What ended up happening was the Russell here… Let’s go ahead and see if we can pull that up for you, here you can see the Russell went ahead and was nicely to the down side and the others were holding up. This was later in the morning, earlier on when we started out here is how it actually looked. I was showing people ‘hey, look! The NASDAQ is actually very bullish. We’re kind of to the middle point of the speed lines today but the actual Russell is flat out negative.’ So you had three that we’re kind of holding and then you had the one. What happened was, we saw the three come back to the one. Gang, this is a strategy I’ve shared with you many times in the past and we got to watch that in full force as this market came down today giving us incredible trading opportunities and a real nice day in the Room as well.

As we close up the day we see the NASDAQ is holding on for dear life at the speed lines. The DOW came off its lows, it closed up here well off the lows. The S&P closed above the speed lines. Only the NASDAQ took the deepest cut on the chin. What we want to see is, are the other three markets going to follow the lead of the Russell today and start to push down below the speed lines here and lead to a nice retracement to the down side. That’s what we’re going to be watching. You’ve got the negative divergences here. You can see with the NASDAQ negative divergence. Over here same thing, the negative divergence, you can see it over and over again these negative divergences. Over and over again. So we have the negative divergences, we’ve got the real low $VIX and let’s see if we can continue to drive to the down side, that’s certainly going to be my favored trade as you can go ahead and imagine.

That’s what we’re going to be watching going into tomorrow’s day trading session. Let’s see if we can get that down below the speed lines for further selling. Otherwise, watch a couple of these other markets. Gold, let’s see if we can get that spike off of this key 13 20 support. Let’s see if we can get the Euro down below that 1.35 80 and let’s see if we can get further selling in some of these Stock Index Futures.

Great stuff, nice way to come back from the holiday. Profitable and fun! Lots of trades there and let’s go ahead and see if we can do it all over again going into the next of the week. You guys have a great night and we’ll look forward to seeing you in the Live Trading Room tomorrow morning or in tomorrow night’s videos. Thanks so much, take care.

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