Money Will Be Made Trading The VIX In 2020

Posted on by Matt Thalman

Market uncertainty creates volatility and the VIX is an index that measures this volatility based on the S&P 500. When news hits the stock market, the VIX increases and when there are fewer outside factors or less uncertainty about the future, we see the VIX fall.

Thus far, in 2020, we have had two situations that have increased volatility in the stock market; the political and military situations between the United States and Iran and the Coronavirus. We are only one month into the year and two major events have occurred which have sent the VIX soaring higher. There will undoubtedly be more pop-up events such as say further political and military issues with Iran or even North Korea perhaps. We will likely see natural disasters pop-up which could cause uncertainty, the situation in England with Brexit and how that is handled could potentially cause uncertainty. Coronavirus is likely to continue to create uncertainty. These are just a few predictions off the top of my head that could cause the VIX to move in the coming months.

One event coming in 2020 that we can all see on a calendar is the Presidential election this year. We know uncertainty about the future causes the VIX to rise and based on the past election of President Donald Trump, we can confidently say that political polling is not very accurate. Thus, we can predict there will be a high level of uncertainty coming down the road with who may be our next President.

With all of this in mind, how do we use this uncertainty to make money? Well, the easiest way is by Continue reading "Money Will Be Made Trading The VIX In 2020" →

Are Silver Futures Set To Breakout?

Posted on by Mike Seery

Silver Futures

Silver futures in the March contract settled last Friday in New York at 17.69 an ounce while currently trading at 17.77 up slightly for the trading week as prices have been stuck in the mud over the last month. I am not involved as I'm waiting for a breakout to the upside to occur, which would happen if prices crack the January 27th high of 18.37. I will not take a short position because I think the downside is very limited.

Silver prices are trading right at their 20-day while still above their 100-day moving average as the Coronavirus is continuing to spread, and I think that will support prices here in the short-term. The chart structure will also start to improve in next week's trade as we could be involved relatively soon with gold prices remaining strong.

The volatility at the current time remains relatively low. However, I don't think that the situation is going to last much longer as fundamentally, and technically speaking, I believe this commodity looks good. Keep a close eye on this market as we could be involved soon as I think the risk/reward is in your favor.

TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Gold Futures

Gold futures in the April contract settled last Friday in New York at 1,573 an ounce while currently trading at 1,585 on concerns about the Coronavirus continuing to spread, especially in China helping support prices here in the short-term. I'm not involved, but I do believe higher prices are ahead, and if you are long a futures contract, Continue reading "Are Silver Futures Set To Breakout?" →

Disappointing Consumer Data Weakens Rally

Posted on by The INO.com Team

The stock market is headed for strong weekly gains despite a rising number of reported coronavirus cases and disappointing consumer data. The S&P 500 and DOW are each up more than +1% for the week as we head into Friday afternoon trading. The NASDAQ, meanwhile, has risen +2% for the week lead by strong earnings in the tech sector, which has dominated or Top Stocks list this week.

Core retail sales, which exclude autos, gas, building materials, and food services, were unchanged last month, the Commerce Department said. The department added clothing-store sales had its most significant one-month decline since 2009. Continue reading "Disappointing Consumer Data Weakens Rally" →

"We Will Use Those Tools..."

Posted on by Gary Tanashian

Yesterday from Fed Chairman Powell…

Powell says Fed will aggressively use QE to fight next recession

Federal Reserve Chairman Jerome Powell said Wednesday the central bank would fight the next economic downturn by buying large amounts of government debt to drive down long-term interest rates, a strategy that has been dubbed quantitative easing, or QE.

Of course, they will. The fix is always in, isn’t it? Wouldn’t want to let a system and associated economy so far out on a brittle limb weighed down by exponential debt leverage go it on its own, now would we? Wouldn’t want anything like a naturally functioning economy because until an utter and complete crash and clean out, there can be no such thing. So more debt manipulation it is!

“We will use those tools — I believe we will use them aggressively should the need arise to do so,” Powell said.

The Fed has traditionally been able to slash interest rates to fight a recession often by as much as 5 percentage points. But that’s impossible now because the Fed’s benchmark rate is currently in a range of 1.5%-1.75%.

“We will have less room to cut,” Powell said.

Duh.

Now comes the money line Continue reading ""We Will Use Those Tools..."" →

2020 Stock Market - What To Expect

Posted on by Chris Vermeulen

Quite a bit has changed in the global markets and future expectations over the past 4+ weeks. Q4 2019 ended with a bang. US/China Trade Deal, US signing the USMCA Continental Free Trade Agreement, BREXIT and now the Wuhan Virus. On top of all of that, we’ve learned that Germany and Japan have entered a technical recession. As Q4-2019 earnings continue to push the US stock market higher – what should traders expect going forward in 2020?

Volatility, Sector Rotation, and Continued US Stock Market Strength.

Our researchers have been pouring over our charts and predictive modeling tools to attempt to identify any signs of weakness or major price rotation. There are early warning signs that the US Stock Market may be setting up for a moderate downside price rotation within the first 6 months of 2020, but we believe the continued Capital Shift that has been taking place over the past 24+ months will continue to drive foreign investment into the US and North American stock markets for quite a while in 2020 and 2021.

The interesting component to all of this, which should keep investor’s attention and really get them excited, is the chance that some type of foreign market disruption may take place in 2020 and 2021. There are a number of things that could potentially disrupt foreign market expectations.

First on the list is this virus event in China (that seems to be spreading rapidly). Second would be the news that Japan and Germany have entered a recession. Further down the list is the very real possibility that many Asian and foreign nations could see a dramatic decrease in GDP and economic activity throughout much of 2020 and 2021.

It is far too early to make any real predictions. Still, traders need to be aware of the longer-term consequences of global markets entering a contraction phase related to a confluence of events that prompts central bank intervention while consumers, financial sectors and manufacturing and industrial sectors are pummeled. Imagine what the global markets would look like if Continue reading "2020 Stock Market - What To Expect" →