{"id":16764,"date":"2020-11-16T07:30:12","date_gmt":"2020-11-16T12:30:12","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=16764"},"modified":"2020-11-16T07:30:12","modified_gmt":"2020-11-16T12:30:12","slug":"the-easy-money-is-off-the-table","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the-easy-money-is-off-the-table\/","title":{"rendered":"The Easy Money Is off the Table"},"content":{"rendered":"

The buy signal isn’t over yet. But, it’s due for a pause.<\/p>\n

The Volatility Index<\/a> (VIX) generated a buy signal two weeks ago<\/a>. Since then, the VIX has fallen from 40 down to 23. And, the S&P 500 has rallied nearly 10%. That’s a stunning move for just two weeks.<\/p>\n

It isn’t over, but the easy money is now off the table. The upside from here is going to be a bit more difficult.<\/p>\n

Here’s an updated look at the VIX daily chart…<\/p>\n

\"\"<\/p>\n

The blue arrows on the chart point to the last three VIX buy signals. Following the previous two signals, the VIX declined towards its lower Bollinger Band<\/a> (BB – the red arrows).<\/p>\n

The VIX is currently still trading about 15% above its lower BB. So, there’s room for the VIX to continue falling – and for the stock market to continue rallying over the next few weeks.<\/p>\n

But, for the next few days, the 60-minute chart of the VIX is telling a different story.<\/p>\n

Take a look…<\/p>\n

\"\"<\/p>\n

The VIX spent last week inside a trading range between 23 and 26. It ended the week at the lower end of that range. But, as the VIX was testing its low, the MACD<\/a> and RSI<\/a> momentum indicators finished the week well above their lows.<\/p>\n\n\n\n
\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

This sort of “positive divergence” is often an early warning sign of a potential rally in the VIX.<\/p>\n

And, a rally in the VIX usually goes along with a decline in the broad stock market.<\/p>\n

Keep in mind, this is just a 60-minute chart. Patterns on this time frame tend to play out within a few days, and the moves aren’t as large as what might occur from a daily chart. So, traders probably don’t have to worry too much about a dramatic decline in the stock market.<\/p>\n

But, we’re probably in for a few days of weakness before the buy signal kicks back into gear again.<\/p>\n

Best regards and good trading,<\/p>\n

<\/p>\n

Jeff Clark<\/p>\n

Reader Mailbag<\/strong><\/h2>\n

In today’s mailbag, Raymond and Fred share their experiences with Jeff’s recent trade recommendations…<\/p>\n

\n

When I checked my account on Sunday evening, all my option positions were underwater. This morning when I saw your sell recommendations, I thought things might have deteriorated further and this might have been a last-ditch effort to salvage whatever could be salvaged. As I read the emails about the two trade recommendations I was stunned – how do you know these things are going to happen?<\/p>\n

You recommended these positions, mine were up significantly just before the election, but I didn’t sell. Then, they all went south and, of course, I regretted not having sold when I had some profit in all the options. I didn’t sell, then really kicked myself after. Until this morning, I just made some money to start out the week – by following your guidance – and I certainly couldn’t have done this on my own.<\/p>\n

I have no idea how you do this, and how you know this stuff. I see all the charts, but I still don’t pretend to be able to see what you see in them. Thanks!<\/p>\n

– Raymond<\/strong><\/p>\n<\/blockquote>\n

\n

Jeff, I bought two contracts each for three of your trade recommendations.<\/p>\n

I sold one contract for two of the trades at over 100% profit and am waiting for the other trade’s announcement tomorrow. Great job!<\/p>\n

– Fred<\/strong><\/p>\n<\/blockquote>\n

Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming \u2013 and send us any questions \u2013 at feedback@jeffclarktrader.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

The buy signal isn\u2019t over yet…<\/p>\n","protected":false},"author":25,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-16764","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/16764","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=16764"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/16764\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=16764"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=16764"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=16764"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=16764"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=16764"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=16764"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=16764"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}