Volatility Alert: Protect Trades Now!

Keep those helmets on                                                                                                                                                                                                                                                                                                                                                                                                                 July 26, 2024 | [Read Online]( [fb]( [fb]( [fb]( [fb](mailto:?subject=Post%20from%20Don%27s%20Trading%20Desk&body=Volatility%20Alert%3A%20Protect%20Trades%20Now%21%3A%20Keep%20those%20helmets%20on%0A%0Ahttps%3A%2F%2Fdon-kaufman.beehiiv.com%2Fp%2Fvolatility-alert-protect-trades-now) We’ve got an explosive week ahead, [so I decided to prepare this video for you.]( If you’ve been warning about volatility for a while now. Well, guess what? The beast is finally stirring, and it's time to keep those helmets strapped on tight! Let's dive right into what's happening in the markets, because there's a lot to unpack as we head into an important week of trading. VVIX is the volatility of the VIX First off, we've got the unholy trinity of VIX, Vol, and VVIX lighting up like a Christmas tree. It's not just fear creeping into the market, folks - it's uncertainty about that fear. It's like a volatility inception, and it's got my full attention. As of now we haven’t seen that scary backwardation. That’s when the near-term contracts are priced higher than the later date contracts. Backwardation in VIX futures is a rare and alarming market condition where near-term contracts are priced higher than longer-dated ones. It signals extreme fear and uncertainty in the immediate future. This scenario can trigger a cascade of events: massive unwinding of short volatility trades, increased selling of S&P futures for hedging, and a potential feedback loop of rising volatility and falling stock prices. While we're not seeing backwardation yet, the narrowing spread between near-term and longer-term VIX futures suggests we're inching closer to this dangerous territory. Traders should stay alert, as backwardation often precedes significant market bottoms. The Intraday volatility has been but the SPX managed to close within its expected range. However, the Nasdaq remains shaky at best. Typically, when we see broad market moves, tech tends to lead the charge. But right now, it's falling behind, and that's not a good sign. It could indicate that the usual market leaders are losing steam, which might spell trouble down the road. But that can all change one way or another as heavy hitters Microsoft, Meta Platforms, Apple, and Amazon report next week. The rotation trade remains strong, as the Russell 2000 continues to show strength, as it gained 1.7% in today’s session. And in an interesting twist, financials are stepping up to the plate. They’re some relative strength in this choppy market. This could be due to expectations about interest rates or other factors, but it's definitely worth keeping an eye on. Remember, sector rotation can tell us a lot about where the smart money is moving. Speaking of money moves, our good old friends at the FOMC are set to report their interest rate decision on Wednesday, July 31, as if there weren’t enough catalysts on the docket. Right now, the market is expecting to see interest cuts by September. But with some high inflation prints recently, will they be saying something different in their July meeting? [I’ve got a lot more to say about all this, click here to watch my video breakdown.]( 🚀 A.I. Timing Webs: The Trading Revolution Gianni Di Poce's game-changing A.I. system is redefining trading success: - 🔥 Identifies breakout stocks with pinpoint accuracy - 💰 Doubled S&P 500 returns in just 12 months - 🎯 Spots the elusive "Golden Ticket" trades - 📋 Monthly Coaching Calls Included Get In Before It's Too Late! [Unlock A.I. Profits Now]( Limited spots available. Don't miss out on this revolutionary trading tool! To your success, Don Kaufman [fb]( [tw]( [ig]( [yt]( Update your email preferences or unsubscribe [here]( © 2024 Don Kaufman - TheoTrade PO Box 24790 Christiansted, Virgin Islands 00824, Virgin Islands, U.S. [Terms of Service](