Will we get a pop Monday .. VIX might indicate a buying signal...?
Tesla deserves to go much lower... but maybe we will get a brief pop next week.
.. Then dive again,
The VIX Is Flashing A Buy Signal
Business Insider By Matthew Boesler
1 hour ago
Jeremy Wilkinson-Smith passes along a chart he says is getting some play today, one that suggests the stock market sell-off may be just about over.
The VIX curve has gone into backwardation today, as the bottom panel in the chart shows. In other words, VIX futures three months out have become less expensive than current-month VIX futures, meaning it costs more to hedge against a market downturn today than it does three months from now.
This inversion of the term structure in the forward VIX curve is indicative of elevated market stress, and on the occasions when we've seen such an event in the past few years, the S&P 500 has bottomed and headed higher.
Dave Lutz, head of ETF trading and strategy at Stifel Nicolaus, calls this "the most important chart in the world." "I've used this before to show 'exhaustion' of stress, and it was a sharp buying signal four times in 2013," says Lutz.
"We did get the signal on January 24, and proceeded to slide another 2% before bottoming and starting the recent leg to fresh highs."
If Vix drops under 16 again soon, then my feeling of this being an IRS Dump Week (sell stuff to pay IRS next week) could be a big part of the current week's correction. The VIX is not showing too much trouble yet. One reason I sold May and June puts (well OTM) on TSLA. I doubt we drop below 165 by June even after a "mild" Q1 ER. Lot of bond holders and buyers above 165 want to see it stay there.
Thanks, this stock deserves to plummet... all the stagnant sales figures coach and others have been posting I am sure are very real... but that earnings is 4 weeks away.. plenty of time for the people who want this stock to stay afloat to keep it there... like you say. I am forced to expect that this bloated balloon will be kept afloat. It's aggravating. After earnings I do expect a plummet from wherever it is then to 180 or 165... I agree that 165 will be as much trouble to push through as 200 appears to be now... Still, that will be a 20% correction, I guess not bad.