Why should we care about the Volatility?

For the longest time since the Emini S&P Futures failed to take out 2808 area on its move back up to the all-time highs of the indices in the 2872 region, it has followed the VX futures inversely. The Volatility Index futures have become seriously traded in recent days as traders and hedgers alike, use it as a hedge against their positions and there is a record amount of money that has poured into these instruments both as futures with a monthly roll and into instruments like the VIX which is an ETF for those who prefer to stay out of the monthly futures rolls.

In recent days, the VX futures have been testing their support levels early during the day when you notice the index futures rise and only to have volatility creep back in during the intraday timeframe or into the Globex sessions the following day and watch the VX futures go back and test resistance levels again while watching the index futures fall. It is almost a rhyme in this daily pattern which has played back so well in the past 11 odd days with the only exception being the attempt to make a move back to Fibonacci extension levels for the indices this past Monday.

At Trade Guidance, we attempt to show you how the market patterns have been rhyming with periods in the past and for the present day situation, we compare the markets to 1987 when Fed Chair exchanged hands from Volker to Greenspan, and in today’s’ environment the Fed Chair changing from Yellen to Powell. Markets have a tendency to repeat patterns and the current environment is oh so close in comparison to the 1987 environment. We invite you to do a bit of your own validation, pull up a chart of 1987 of the S&P and compare that to the first three months of 2018 and tell us if you see similarities.

For you intraday participants in the futures and currency markets, we present a playbook style trade suggestions with Suggested Entries, Stops, and Targets.

While trading intraday in the current environment can have you all shook up, we make it our job at Trade Guidance to help you with succinct entry/exit suggestions. Email us at info@tradeguidance.com and give us a chance to take the mystery out of your entries and exits and then show you the way to be a consistently profitable trader each day!