If the market rallies, here’s my target level
Back in July we wrote that we were buying
the VIX at 10.50 as that was as sure a way as any to participate in the next leg
down in stocks.
The VIX spiked above the 17 handle this morning, which on the
face of it looks bullish, but we note in the chart below that this trendline
resistance for the VIX has lined up with sizeable bounces in the SP500 in the
Therefore, traders can play this one or two ways. We think
covering some shorts is advisable to reposition on a bounce. The reason is that
it is normal to test the underside of broken trendline support turned
resistance, now crossing overhead at 1210.
However, we think the market is in breakdown mode so a rally
to about 1195 may be all we get before the next leg down targets 1140. Below
here opens up the way for 1075.
FX Money Trends
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Black is the fund manager at Black Flag Capital Partners and Chairman of
the firmâ€™s Investment Committee, which oversees research, investment and
trading strategies. You can find out more about Jes at
to organizing the hedge fund he was hired by MG Financial Group to help
run their flagship news and analysis department,
Forexnews.com. After four
years as a senior currency strategist he went on to found
FxMoneyTrends.com – a research firm catering to professional traders.
Black’s opinions are often featured in the Wall Street Journal, Barrons,
Financial Times and Reuters. He has also written numerous strategy pieces
for Futures magazine and regularly attends industry conferences to speak
about the currency markets.