When The UVXY Stops Sucking

Hey VWAPians,

What happened yesterday was big.

Like really BIG.

The ProShares Ultra VIX Short Term Futures ETF (UVXY) is a fund that in very simple terms tracks short-term volatility.

Which means it’s basically made to go down. The market goes up and the UVXY goes down. That’s what normally happens.

When the UVXY goes up, there’s a problem brewing.

Everything we do is based on trends.

We do what “normally” works and let it be validated by the VWAP.

I say normally because I expect it to happen most of the time.

The key today is to understand that most of the time doesn’t mean all the time.

Sometimes it doesn’t happen, so never ignore the VWAP.

The QQQ normally wants to go back up after a move down.

But yesterday wasn’t a normal day.

This is Not “normal”I’ve been preparing you for this moment for the past few weeks though. Every time we talked about the UVXY and staying on the right side of VWAP.

And today I’m going to explain more about why I was so adamant about staying short after my LIVE trading hour yesterday.

Spoiler alert: It has everything to do with UVXY and VWAP.

Don’t miss my LIVE trading hour at 9:30 a.m. ET…right here.

And to get you ready for the day…

You can catch my rolling watchlist here, as well as my daily Warlock Watchlist at the top of ThisIsVWAP.com.

QQQ STOPS IN PLACE, LET ‘ER TANK

Yesterday before leaving, I told you the two places that would be good stops for the QQQ short trade (circled in red below).

The lower level being just over 367.10 and the upper range being the VWAP around 367.70, where the VWAP just happened to be hanging out at the moment.

Stops over 367 and 367.70I was very clear towards the end of yesterday’s LIVE trading session that nothing was going to get me out of my QQQ short thesis other than a move back up to those levels.

And look at what happened the rest of the day… The QQQ tanked, hitting a low of 360.93 before rallying into the close.

Never got close to the stopsThere was one major reason behind my conviction yesterday.

And that was the UVXY.

As mentioned earlier, and every time I talk about it, the UVXY is a horrible product. It’s actually made to go down… seriously.

So when the UVXY stops acting like the worst product on earth, like it was yesterday, I know the markets are in trouble.

UVXY showing real strengthThis was the first time in a long, long time that UVXY has made a move like this.

And that, my friends, gave me the conviction I needed to use wider stops on a QQQ short.

If you’ve been with me for a while, you know how dangerous it is to stay short the QQQ.

But again “normally” leaves the door open for the times that aren’t normal.

The times like yesterday when staying short the QQQ was a killer trade.

VWAPians are always prepared for that because we know to be on the right side of VWAP, and to pay attention to the UVXY.

Join me LIVE every day at 9:30 a.m. ET and Keep Learning.

Check out my rolling watchlist here, as well as my daily Warlock Watchlist at the top of ThisIsVWAP.com.

See you in the room!

Kenny “The Warlock” Glick

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Comments

One response to “When The UVXY Stops Sucking”

1. Kenny you are the man. Seriously. After all the research I have been doing to become a day trader, the VWAP is clearly the only way. I only wish I would have found you sooner in life. I look forward to watching you every morning and I am ecstatic for the service that is coming our way. I am trying to learn as much as I can and watching you is teaching me the ways. But there is so much more to learn as I am just getting started. I look forward to working with you in the future so keep an eye out for me, Ian the vwapIAN on MML.
   Thanks again for all you do, it is seriously life changing.

   Regards,
   Ian the vwapIAN

   Reply