Trading The Vix Etf

Markets Ready to Bounce and Go Higher!

Commodities & Stocks Ready to Bounce or Rally?

 

Commodities and stocks almost look ready for a rally or at least a relief bounce. The market is down over 5% and the normal pullback this year has been 4%. Using technical analysis and inter-market analysis we can see that the market is reaching extreme lows and this usually means we are only a couple days away from a rally.

 

I work with several market technicians as we all analyze the market a different way and share our work with each other to gain maximum insight on the broad market moves. We analyze momentum cycles, magnetic cycles, volatility levels, support & resistance levels, volume analysis and inter-market analysis.

 

Each of us has found a formula which works for our individual style of trading. And by combining our work we have found that we can collectively produce some very exciting trading signals for the broad market. We focus on leveraged index funds in order to take advantage of our insights. While nothing in trading is ever perfect, the analysis for timing the broad market is very exciting.

 

Here are some quick charts on where the market is trading.

 

US Dollar – Daily Dollar Price Chart

 

This chart is a no brainer. The trend is down and trading at resistance. If the US dollar reverses back down we will see stocks and commodities move higher.

 

VIX – Daily Volatility Index

 

Again, overall the trend is down and trading at resistance. As the saying goes “When the VIX is high its time to buy”.  Just to be clear, the VIX is low compared to the previous highs set back in 2008 which was around the 80 level. But, if we want to keep things simple for the current trend then the VIX is high for our current market condition. The VIX moves in the opposite direction of the equities market.

 

DIA – Dow Jones Industrial Average ETF

 

Here is the Dow Jones Index ETF and it clearly shows that when investors are selling out of their positions and getting scared of a market collapse, volume rockets higher. When we see the price pullback to possible support levels and volume increases that is a time when we should be looking to scale into a long position for a bounce, such as now.

 

 XLE – Energy Sector ETF

You can see that the energy sector is very close to a support level and volume is high. With the US dollar about to reverse back down it will help boost this sector as it is tied in with commodity prices which rise with a falling dollar. I expect we will see a price gap lower and fill this area before moving higher.

 

 GLD – Gold ETF Fund & Silver

 This chart has not changed much from last weeks report. We are getting the drop as expected this week. We could see the gap fill from early October before gold stabilizes.

 

Silver is in the same situation. Gold and silver move in tandem so we are waiting for a bottom before looking for a low risk entry point.

 

 Commodity & Stocks Trading Conclusion:

 

To keep things short and to the point, I am seeing momentum cycle lows as of today, magnetic wave lows today, and most commodities and indexes trading at support. These observations, coupled with the US dollar at a possible resistance level and market volatility spiking to an extreme high, lead me think a bounce is in the cards.

 

The market has had an amazing rally so far this year and I feel that we will have a solid year end rally going into Christmas. That being said, the recent sharp correction could form an ABC retrace pattern which means we get a bounce in the next week or so, then one more multi day sell off which will scare even more bulls out of the market. I am going to be scaling out of this oversold play quickly to lock in some gains while allowing a smaller position to ride for larger gains. 

 

For my free Trading Reports visit my website: www.GoldAndOilGuy.com

 

 

 

 

 

About the Author

Chris Vermeulen
Contributing Writer
Chris Vermeulen is Founder of the popular trading site TheGoldAndOilGuy.com (http://www.thegoldandoilguy.com). There he shares his highly successful, low-risk trading method. Since 2001 Chris has been a leader in teaching others to skillfully trade in gold, oil, and silver. Subscribers to his service depend on Chris’ uniquely consistent investment opportunities that carry exceptionally low risk and high return.

Short Term Trading Strategies That Work $35.00 Market volatility has been at record levels in recent months, leaving every trader and investor to ask the same question: “Am I prepared to handle the market conditions?” In Larry Connors’, CEO and Founder of TradingMarkets, Short Term Trading Strategies That Work, he discusses 16 simple strategies crucial to the success of any trader or investor. These strategies have been both back-tested up to …

Options Volatility Trading: Strategies for Profiting from Market Swings $24.38 How to collect big profits from a volatile options market Over the past decade, the concept of volatility has drawn attention from traders in all markets across the globe. Unfortunately, this scrutiny has also created a proliferation of myths about what volatility means and how it works. Options Volatility Trading deconstructs some of the common misunderstandings…

Futures March 2011 Bill Eckhardt on Cover (Evolution of Trading), Top Traders, Scalp or Swing Trading, Equities Outlook, ETF Guide, Cheap Tail Protection, Market Timing w/ VIX, Trading Forex From the Cloud, Top 10 Rules of Portfolio Diversification …

ETF Trading Strategies Revealed $14.96 This book is in New – Excellent condition

Trading VIX Derivatives by Rhoads, Russell Edition ILL, 1 $25.99 A guide to using the VIX to forecast and trade marketsKnown as the fear index, the VIX provides a snapshot of expectations about future stock market volatility and generally moves inversely to the overall stock market. Trading VIX Derivatives will show you how to use the Chicago Board Options Exchange’s S&P 500 volatility index to gauge fear and greed in the market, use market volatility to your advantage, and hedge stock portfolios. Engaging and informative, this book skillfully explains the mechanics and strategies associated with trading VIX options, futures, exchange traded notes, and options on exchange traded notes. Many market participants look at the VIX to help understand market sentiment and predict turning points. With a slew of VIX index trading products now available, traders can use a variety of strategies to speculate outright on the direction of market volatility, but they can also utilize these products in conjunction with other instruments to create spread trades or hedge their overall risk.Reviews how to use the VIX to forecast market turning points, as well as reveals what it takes to implement trading strategies using VIX options, futures, and ETNsAccessible to active individual traders, but sufficiently sophisticated for professional tradersOffers insights on how volatility-based strategies can be used to provide diversification and enhance returnsWritten by Russell Rhoads, a top instructor at the CBOE’s Options Institute, this book reflects on the wide range of uses associated with the VIX and will interest anyone looking for profitable new forecasting and trading techniques.

Understanding Etf Options (Hardcover) $48.85 Proven ways to increase profits while reducing risk in one of today’s fastest growing marketsFinding a safe investment in today’s markets makes looking for that needle in a haystack seem easy. With a single whale able to move a market, herds of elephants ready to stampede after it, and a global computer network executing high-frequency trades in milliseconds, an investor might think stuffing cash under a mattress is safe financial planning. But those dollars have lost about 40 percent of their buying power in the last 20 years.Understanding ETF Options is the best way to protect and grow your assets in the financial climate ahead.This hands-on guidebook gives you a unique audience with options expert Kenneth Trester, who has traded on the exchanges since their inception in 1973. This book culls his experience in systems analysis, operations research, and investment management to help you diversify risk while profiting on market volatility.Through conversational explanations and real-world examples, it lays out how ETFs offer retail investors easy access to diversified financial value and demonstrates effective techniques to acquire, safeguard, and accrue wealth by trading options on these unique securities.Whether you are an experienced investor or have never executed a trade, Understanding ETF Options can get you up and running on the exchanges with confidence and control. It comes with such essential tools as the Fair Value Option tables and covers everything you need to know to trade ETF options successfully, including:An insider’s explanation of ETFsHow to identify valuable ETFsHow to avoid rogue wavesStrategies for achieving your goals among the elephants, whales, and computersProfessional traders’ secrets for option buying and writingAs far as options are concerned, everything comes down to time and movement. Now is your time to make a move and pu

ETF Strategies and Tactics by Rosenberg, Laurence; Weintraub, Neal; Hyman, Andrew Edition ILL, 1 $41.49 PrefaceForewordIntroduction Part I: ETF FundamentalsChapter 1: Basics of Exchange Traded Funds (ETFs)1.Origins2.Vanguard and Indexing3.Growth of ETF Market 4.Implication of Rise of ETFs for investment marketChapter 2: ETFs and Mutual Funds 5.Similarities6.Differences7.Continuous PricingChapter 3: ETF Structures and Costs8.How are they developed?9.Indices10.Costs11.Different types of structuresChapter 4: ETF Varieties and common examples12.Index ETFs13.Closed-End ETFs14.Auction Rate PreferredsChapter 5: ETF Regulation15.US ETF Regulation16.SEC17.NASD18.Other19.European ETF Regulation20.Other regulationPart II: Practical Aspects of Using ETFsChapter 6: ETF Selection21.Aligning ETFs with investment strategyChapter 7: Intelligent ETF Purchasing and Selling22.Looking at Costs23.Looking at Structures24.How to make and intelligent decision on which instruments to use25.ExecutionChapter 8: Technical and Fundamental Analysis of ETFs26.Fundamental analysis27.Technical AnalysisChapter 9: Trading Overseas ETFs28.Practical Aspects29.Foreign Exchange RisksPart III: ETFs Place in Your PortfolioChapter 10: Assessing Investment Goals30.Using ETFs requires understanding of investment goals31.Determining investment goals32.Risk managementChapter 11: Using ETFs to manage portfolio risk 33.Markowitz and portfolio theory34.Diversification35.HedgingChapter 12: ETF Strategies 36.Long 37.Short38.SpreadingChapter 13: Understanding the uses and abuses of ETFs39.Using and index fund vs. ETFs 40.John Bogle discussed how ETFs are the growing part of the index universe, while they appear to be used more for speculation41.Does the user want a broad index that captures the marketPart IV: Advanced ETF TopicsChapter 14: Options42.Basic options principles43.Options Strategies44.Using ETF optionsChapter 15: Sector Investing45.Sector investing strategies46.Using ETFs to implement sector investing strategiesChapter 16: Long Term Investing47.Determining long range goals48.Equity Bias49.Diversification50.CostsChapter 17: International Investing51.Common ETFs52.Legal aspects of trading outside US53.Foreign exchange risk54.Tax considerationsChapter 18: Day Trading 55.Psychological profile necessary to day trade56.Financial net worth57.Technology and systems needed58.When to get outChapter 19: Speculative Trading59.Types of Speculative Trading60.Time frames61.Trading Plans62.Risk ManagementPart V: ConclusionChapter 20: The View Ahead63.Growth64.More overseas investment operations65.Continued need for good adviceAppendixAppendix A: ETF publicationsAppendix B: ETF websitesAppendix C: Directory of ETF Providers

Trading Etfs (Hardcover) $97.62 Valuable not only for a comprehensive cataloguing of the vast array of exchange-traded funds that are now available but also for the insights into successful trading techniques, Trading ETFs, Second Edition is a refresh of the definitive guide to this increasingly vital part of the capital markets. The book includes numerous new examples of the kinds of techniques that Wagner uses in his selection of the most timely ETFs to trade and underscores one of the core insights of his trading discipline, which is to ‘trade what you see, not what you think.’ This book is aimed at professionals who are using—or should be using—ETFs as an asset class within their portfolios, as well as for the individual investor who wants exposure to wider sectors and geographical regions than those available, with comparable cost-effectiveness,elsewhere.Revisions focus on pros and cons and potential pitfalls of trading the latest class of ETFs.  The new ETFs include inversely correlated and leveraged ETFs and the dangers, risks, and benefits associated with each new class of ETF.  Additionally, a refresher on the initial concept of ETF selection will be included as well as new case studies on ideal entry and exit points and examples of real trades.