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Looking Ahead – VIX Closes Above 30 – 10Oct, 2022

Market Outlook – Traders are in a battle to hold support with bounces still showing resistance. Lots of people are talking about this week being an extreme week to watch. With the VIX closing above 30, most volatility traders say that it is better to buy the VIX as it moves higher instead of when in breaks near its lows.

There are those suggesting that Friday’s fade will continue, and I am inclined to agree but want to see a bounce because we are so far away from the moving average ribbons – HOWEVER – momentum is extremely negative so the bounces might be shallow. There is also a group that is looking at a very big bounce on Tuesday that will fade on Wednesday, so we are on high alert watching the markets. I still believe that we are in a strong bearish market with every bounce likely to fail.

Stanley Druckenmiller who holds a better performance record than Warren Buffet over the long haul believes that we could have a decade of sideways motion.

Take a few moments to look at each of these images – note the levels of the weeks and months.

Orange lines = yearly range; Green lines = monthly range; Yellow lines = weekly range. Candles bodies at tight in the current four hour formations – so we have a little bit of an overnight wait state. Trade level to level and we’ll watch for regions to hold or break. It is going to be a very interesting week and we certainly could make a lot of money. Stay Frosty

ES_F …Trend is still down but traders are desperately trying to find a bottom
NQ is sitting at the bottom of its last month
YM – trend is still stronger than both the NQ and the ES
CL- the financialization of oil right now could bring it down to earth even as resources tighten
GC- gold lifting but again – financialization of the gold sector could bring this down even if the dollar takes a dip
The dollar watch is important –
Notice how the shape of the euro curve looks just like the broad market