So yesterday SVB Financial (SIVB) announced that they failed to raise capital, and put the markets and financial sector into a death spiral.

Markets tanked, uncertainty rose…

And one little indicator signaled to me that we were in for a doozy of a day today.

That indicator is UVXY.

Now, I won’t get into the weeds of the technical of UVXY.

But just know that UVXY is a market instrument that allows traders to capitalize on volatility in the markets.

The more uncertainty, and the more volatility, the higher the VIX goes, and the higher UVXY goes.

UVXY shot up yesterday after the SVB news…

And if you ignored it, you were probably caught in the market downturn at the open…

Just look what the markets did this morning:

QQQ movement from this morning.

In the Warlock’s World, I was begging my traders to jump in on this move downward.

UVXY gave me my game plan going in.

The more volatility and uncertainty there is, the more traders are likely to sell off or short the market.

In the Warlock’s World, I was calling to short the market when it broke that chop at $291.70

$291.70 got you all the way down to $289 and change.

100 shares of that gets you a quick $200 on the day all before 9:45 am.

The only thing I would be wary about is trying to trade UVXY itself using the VWAP.

Sometimes it wants to cooperate, sometimes it doesn’t.

But what it DOES do for us is tell us what market volatility sentiment is like.

I would highly suggest you at least take a peak at UVXY if you come across a big news story that is likely to rock the markets.

It can help you form a plan throughout the day to trade the markets.


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