Markets did a little rally on Friday before Xmas which I think they tried to hold up so everyone is happy into Xmas !
At least I were very happy , as the VIX kept moving higher (TVIX up 5%) on Friday as the markets were up too ,, so here you see the interesting correlation that actually the fear were not decreasing ,, but actually increased higher with the markets.
According to my analysis we should get a very nice SELL OFF and reversal to the downside which could be sharp to the downside.
We have 3 auctions , Tuesday France , Wednesday and Thursday Italian auction which could be in focus this week.
However ,, we are still in holiday trading so maybe they will delay it to new year ,, but honestly I think the sell off could already start very early this week.
My plan is to hold my swing trade TZA and TVIX as I think we could see below 1100 as a possibility over next weeks.
The VIX backtested an important trendline which we broke out of this summer,, now a bullish backtest is very good for the VIX and I think a major pivot top in markets is here.
Conclusion:
I remain heavy short markets via TZA and TVIX and holding for a swing trade, see you all in www.nwatrading.com trading room - hope everyone had a very nice christmas with the family. Also the pump into close on Friday look to me like a bull trap.
I think no selling into the year. Keeping markets up is easier on low volume.
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