Weekly Wisdom: VIX Stays Weak As Earnings Season Begins

Greetings fellow traders and welcome to your April 20th edition of Weekly Wisdom: Levels to Know and Moves to Look For!

Let's get to what we're currently seeing in these crazy markets and what we have our focus on going forward.

?

Taking a look back on this week, April 17 - 21:

• Markets have more or less stayed uneventful but continue to hold up with bulls remaining in control. We wrote last week to look for a close in $SPX futures over 4150 and we finally got that last Thursday with a close of 4172. We have since seen small, choppy follow-through to the upside, just about reaching our 4200 target with a high of 4198 this past Tuesday.??
• A key part in this market holding up has been the consistent weakness from the $VIX, which since last week has made a new low on the year down to 16.17. The 15-14 area continues to be major support to watch for there.
• $VVIX has started to deviate in a bearish way, as this has stayed off year lows and has been rallying since the Monday low of 81, breaking out of last week’s range to a high of 98. Keep in mind that above 100 in $VVIX is when the $VIX can really start to expand and get loose.
• Friday, April 21 the PPI data for France, Germany, the EU, and the UK will be released throughout the early morning hours. The US will get updates for flash manufacturing PMI and flash services PMI at 9:45 a.m. ET.

Here's what we are eyeing next week, April 24 - 28:

Level Highlights:

• Bulls continue to hold strong, but should be cautious of the continued VIX weakness - this trend can continue but will not last in this fashion forever. Bears want to see a snapback here over the 17 level, while bulls are looking for continued weakness down into the 15-14 range.
• The $VVIX divergence is very notable and should give bulls some caution as well. Bears want to see this back above 100 which should turn VIX higher. Bulls want to see a failure back down below the 90 breakout.
• After all this time of chop and consolidation, $SPX futures have solidified some support at 4100 now. A close below there may start to break this chart down in a bigger picture. The next major resistance for bulls above 4200 is 4300 - be very careful over 4200 if we do not see any sort of VIX bounce before then.

Upcoming News:

• Tuesday, April 25 we’ll get the Conference Board's consumer confidence index, March new home sales, and the Richmond Fed manufacturing index at 10:00 a.m. ET.??
• Wednesday, April 26 we get updates for March durable goods orders, core durable goods orders, goods trade balance, and preliminary wholesale inventories all at 8:30 a.m. ET.??
• Thursday, April 27 we get the first estimate of Q1 GDP, advance GDP price index q/q, and weekly jobless claims at 8:30a.m. ET. This will be followed by March pending home sales m/m at 10:00 a.m.?
• Friday, April 28 we get the March PCE index and core PCE index (something the Fed is closely watching with CPI) as well as personal incomes, personal spending, and the Q1 employment cost index all at 8:30 a.m. ET. This is followed by Chicago PMI at 9:45 a.m. and the University of Michigan's consumer sentiment index and inflation expectations at 10:00 a.m.??

?

Here's Your Chart of the Week:

The AAII Sentiment Survey offers insight into the opinions of individual investors by asking them their thoughts on where the market is heading in the next six months and has been doing so since 1987. This market sentiment data is compiled and depicted below for individual use.

Investor sentiment is measured with a weekly survey conducted from Thursday at 12:01 a.m. until Wednesday at 11:59 p.m. Tracking sentiment gives investors a forward-looking perspective of the market instead of relying on historical data, which tends to result in hindsight bias.

Source: https://www.aaii.com/sentimentsurvey

?

SPY Daily Update:

$SPY continues to hold up for the bulls - 408 is now solid support for $SPY with 415 acting as resistance and 413 acting as a bit of a chop inflection point.

SPY Weekly Update:

$SPY weekly chart continues to consolidate after the big move from the month of March. Similar to the VIX selling, this trend can continue but we will see a red weekly candle for $SPY at some point in the future.

Don't miss next week's free pro trader Q&A. Senior Trader Derrick Oldensmith joins Conversations With A Pro Trader on Wednesday, April 26. Register for free now!

Want to Trade With My Team? Click here!

-Patrick Hawe

?

?

Disclosures

Patrick Hawe's current positions:

*As of 1:40pm ET April 20, 2023

?

Patrick Hawe is an Associated Member of T3 Trading Group, LLC (“T3TG”), a SEC Registered Broker-Dealer & Member of FINRA/SIPC. All trades made are placed through T3TG.

T3 Live, LLC is a financial publisher that disseminates information about economic, business, and capital markets issues through various media. T3 Live is not a Broker-Dealer, an Investment Adviser, or any other type of business subject to regulation by the SEC, CFTC, state securities regulators or any “self-regulatory organization” (such as FINRA). Although T3 Live and T3TG are affiliated companies by virtue of common ownership, the companies are managed separately and engage in different businesses.

The programs that T3TG distributes (including articles, commentary, videos, blogs and social media postings) are for informational and educational purposes only. No one should consider the information disseminated by T3TG to be personalized investment advice, a recommendation to buy, sell or hold any investment, an offer (or a solicitation of an offer) to buy or sell any investment, or the provision of any other kind of investment advice. No one associated with T3TG is authorized to make any representation to the contrary.

T3TG provides information that viewers of its programs may consider in making their own investment decisions. However, any viewer will be responsible for considering such information carefully and evaluating how it might relate to that viewer’s own decision to buy, sell or hold any investment. Such decisions must be based on that viewer’s individual and independent evaluation of his or her financial circumstances, investment objectives, risk tolerance, liquidity needs, family commitments and other factors, not in reliance on any information obtained from T3TG.

Statements by any person (whether identified as associated with T3 Live, T3 Trading Group, or any other entity) represent the opinions of that person only and do not necessarily reflect the opinions of T3TG or any other person associated with T3TG.

It is possible that any individual providing information or expressing an opinion on any T3TG program may hold an investment position (or may be contemplating holding an investment position) that is inconsistent with the information provided or the opinion being expressed. This may reflect the financial or other circumstances of the individual or it may reflect some other consideration. Viewers of T3TG programs should take this into account when evaluating the information provided or the opinion being expressed.

Although T3TG strives to provide accurate and reliable information from sources that it believes to be reliable, T3TG makes no guarantees as to the accuracy, completeness, timeliness, or correctness of any such information. T3TG makes no guarantee or promise of any kind, express or implied, that anyone will profit from or avoid losses from using information disseminated through T3TG.

All investments are subject to risk of loss, which you should consider in making any investment decisions. Viewers of T3TG programs should consult with their financial advisors, attorneys, accountants or other qualified professionals prior to making any investment decision.

The risk of loss in trading equities, options, forex and/or futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage that is often obtainable in options trading may benefit you as well as conversely lead to large losses beyond your initial investment. Past results are not indicative of future results. No representation is being made that any account will or is likely to achieve profits similar to those shown.

T3 Trading Group, LLC is a Registered SEC Broker-Dealer and Member of FINRA/SIPC. All trading conducted by contributors associated with T3TG on the Virtual Trading Floor is done through T3TG. For more information on T3 Trading Group, LLC please visit www.T3Trading.com.