Rob Reviews The $VIX And Where The Next Moves Will Likely Come From

Okay gang, welcome back. As we kick off this evening, lets go ahead and take a look at some of the key markets we have previously focused on the last several days and what we’re looking for and or what we continue to look for, as we look at the euro here, you recall the 1.3810 area was what we’ve been watching out for and we’re still watching out for that level.  We’ve come up now a second day in a row and actually tested that level and failed to break through. So if we get through that level and particularly the 1.3820 that could lead to some real nice trading in the Euro to the long side, so we’re going to be watching for that but we do need to get above that 1.3810/ 1.3820 area first.

As far as Gold is concerned, the last time we talked about Gold we were looking to see if we were going to break down below this distribution area. We did that and it’s been slowly bleeding down since.  In the short term still looking for short side trades in this as long as we remain down below the speed lines here.  As far as crude oil, crude oil failed to breakout from the level we were looking to breakout from above the other day. We had this distribution bar here so of course again that is naturally a key resistance area and we hit that distribution area, failed miserably, and pushed down back into the channel here. So no fresh trading opportunity at this point now. We did not get the breakout above we are basically sitting here in a bunch of gobbily gook (there is the official professional term for it). So nothing fresh to do with this at this time, we’ll see if we can push down lower below the 9820 area, then I’ll start looking for fresh shorts, but right now we’ll kind of stay away from that.

As far as the stock index futures they have been the real focus in the live trading room. What It really goes back to two different pieces of information we’ve shared with you in the last several videos. Number one is the S&P was basically remaining sideways net and net as was the Dow both these were more or less sideways while the Russell and the NASDAQ took pretty healthy retracements to the backside. So let’s pull up the $VIX, the thing about the $VIX I’ve been pointing out this range, even here in this nightly video and explained to people is this is a consolidation this could actually turn around with all the negativity. If you guys have been following the videos for the last week or two you recall I said that, with all this negativity here, we could be due for more upside and the $VIX will allow for that. If we take a look at this from a daily and a weekly basis you can see that long term blue line there and if we flip it over to a monthly basis we’ve been certainly lower than we are now.  Going into 2013 we’ve hit lower levels several times in 2013.  Then we look back 2005 to 2007 when things finally started to become unhinged we were even lower than that as you can see. So as I was saying from a $VIX perspective we can actually continue to push lower.  So that’s why I said don’t be surprised if we do see an upside because the $VIX will allow for that still from that perspective. Now, as we go ahead and we go back to the stock index futures then, basically what we’re looking for is to see if the NASDAQ and the Russell could get above key resistance levels. They did, so it was firing off the long side trades and that was great. So basically what I also said was that, and I’m not sure if we said this in the videos here or that was in the live trading room but what we were commenting on some of our students, was that with the DOW and the S&P, we were actually looking for the Russell and the NASDAQ to play catch up. So we were actually looking for longer, wider ranges in the two that have been kind of the laggers to play a little bit of catch up and we got that led to some powerful movement that you saw today.

So, as we go into tomorrow I’m happy to see we’re back above the speed lines from this perspective.  When I say I’m happy I don’t care if it goes long or short gang. Whether it’s our options plays or futures, we’ve got a lot of different strategies and tools we use for the different markets I just want it to move and 2014 it has been moving! Fantastic! As we looked at yesterday closing out, first quarter was one of the best trading quarters we’ve seen in some time there with the activity. We told you 2014 was going to be a great year and it’s been exactly that.

So, as we go ahead and we look here going into tomorrow we are overcooked as you’ll see here on a lot of the stochastics, we’re buried actually on the NASDAQ, the Russell and the S&P.  Typically what should happen after this is we should see a little bit of a pull back.  If it is a shallow pull back we could actually see continuations on the upside as I just showed you the $VIX will allow for that.  There is still plenty of movement we can see to the upside with the $VIX, so if we get a small pullback here that’s going to strengthen that opinion.  If we go ahead and we start to take off tomorrow I will look and be fairly aggressive early on for long side trades there but it can’t just be in the open it can’t be a big hurrah into the open that’s likely to fizzle after that. It’s got to be little bit of a push in there and really after that 9 o’clock central time that’s when I’d like to see further pushing to the upside.  So if after 9 o’clock central 10 o’clock eastern we see further rallying then we’ll start getting more aggressive there, okay.  So, that’s kind of the strategy for tomorrow, we’ll see what the ADP numbers factory orders presents and see if we can get a continuation.  If it starts to pull back into tomorrow morning I’ll just go ahead more or less take a wait and see attitude.  I really don’t want a short up in this area per say, especially when we’re back above the speed lines showing the signs of life in the market.  I don’t want to focus on the short side at this point, I was much more aggressive on the short side when we fell on the stock index futures we just fired off trade after trade after trade since things took off to the down side in the NASDAQ and Russell but now that we’re back above those I really don’t want to be aggressively shorting here at this point even though tomorrow we’re technically due for a pull back.  We’ll let that pull back resolve itself and then we’ll see if we start to push back.  We’ll keep you informed on what we’re looking at with that.

Great stuff, fantastic 2014 first quarter and I suspect 2014 second quarter is going to be just as good.  I look forward to seeing each and every one of you in the live trading room tomorrow morning or in tomorrow night’s videos where we can review more stuff.  Take care, you guys have a wonderful evening.

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