The ‘Flying Unicorn Crapping Rainbow Cats’ Trade
Hey there, VWAPians!
Every day, we conquer the market.
I’m sure you’ve heard me say that this market never goes down.
That’s because this market is built on the corpses of the shorts.
What I am NOT saying is you can’t go short and live to tell the tale, however.
There are NUANCES to this ish, homie.
While I may be The Warlock — the nimble day trader cashing in VWAP trades left and right EVERY DAY…
I didn’t get to Warlock status by just blindly following the rules.
Garrett Baldwin may be the Master of Momentum on Money Morning LIVE, but I’ve got a few tricks up my sleeve, too.
Tricks that I show YOU, EACH DAY, starting with Garrett and crew on Money Morning LIVE from 8:30 to 9:30 a.m. RIGHT HERE.
Then I get comfy in my sanctum, my Warlock’s World, where I share my vast knowledge with my legion of VWAPians.
I guess you could get by with just trading VWAP. In fact, I think not trading VWAP should be ILLEGAL.
The market is RIGGED.
VWAP is the EKG, the heartbeat of the market, and it’s what the algorithms that make up the majority of the market move around.
Look at nearly ANY stock chart. Price eventually ALWAYS comes back to VWAP. It’s like a magnet.
My man Solid Jell-O said it best recently: VWAP is ALWAYS going to be your destination.
So trading WITHOUT VWAP should be against the law.
Since it’s not (yet), it’s just foolish to trade without VWAP.
It’s not illegal to be foolish, or trust me, I woulda been locked up a looooooong time ago.
What also is foolish is to blindly ignore everything around you.
Stocks often move in families. We’ve seen this with EV stocks going CRAZY lately. This is called pin action.
In bowling, you get a strike when the ball hits the front center pin so perfectly that the rest of the pins falling knock the others down. That’s pin action.
So in stocks, it literally pays to keep an eye on the same kinds of stocks when one is going bananas, because that one stock could drag the others higher or lower.
In fact, we got a GREAT example of massive pin action on Monday, which reminds me of one of my patented Knowledge Bombs about the market unicorn you can’t ignore…
KNOWLEDGE BOMB: IF UVXY GOES GREEN ON A MONDAY, THE MARKET IS GOING DOWN
In the case of the Proshares Ultra VIX Short Term Futures ETF (UVXY), it cascades across the entire market.
UVXY itself is only meant for short-term trading. It’s basically built to go down.
So when it starts to rise, alarm bells start ringing in my head.
Mark Sebastian would be so proud of me right now.
In pre-market trading on Monday, the market was gapped up. It was a sea of green. Looked like we were headed upwards.
But I noticed UVXY started to rise before the market opened.
Usually, Mondays are full of optimism for the market. It’s a fresh week, and whatever happened before the weekend is a little in the rearview.
So it’s not often that UVXY is green on a Monday. But when it is, the market is going down.
UVXY going green on a Monday is like a unicorn flying across the sky crapping out rainbow cats.
I know my savvy VWAPians already know what to do next — go short.
If UVXY is telegraphing that the market is going to go down, that’s an opportunity for bears.
This is why I like day trading – green days, red days, Maydays, gray days – it’s all an opportunity for VWAP trades.
But keeping an eye on the bigger picture of the market can help guide you toward opportunity.
That’s why the Daily Decode with my brother, the 8-Baller, is SO important.
Not only does he break down my trades at noon every day in my Warlock’s World, but 8-Baller has his ear to the street and goes into the macro factors affecting the market as a whole.
And he’s always dropping tips on how these factors can be turned into profitable opportunities.
That’s all for now, VWAPians. I can’t wait to see what opportunities we have together this week.
Kenny “The Warlock” Glick
December 14 2021
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