"Aggressive" VIX Short/ES Long Setup

3 oct. 2023

Possible volatility short/equities long shaping up. Still a lot of downside momentum/catching a bit of a falling knife + we'd rather see the NQ fill its gap south of 14400, but it could be time to start thinking about index longs given the levels both stocks and vol are approaching. Given that the Nasdaq still has further to fall before completing its gap fill, the ES could easily continue its decline (watch support/resistance levels ~4200). Something to keep in mind... Personally, we are waiting for confirmation entries before buying (looking for trend reversal signals on small timeframes), but more aggressive traders may find existing conditions more suitable for starter positions. Targeting is loosely based off of the red ES zones, but can also be mechanically derived and should be refined. Good luck!

JHart @ LionHart Trading

3 oct. 2023

Note

Idea working so far! If you're long an index/short vol, consider taking mechanical profits based on risk:reward. We may get a retest of lows at some point. That said, we're trying to form some "fresh"/new demand on the ES 30-minute chart, so if that occurs, lows might not be overtly retested...

4 oct. 2023

Note

Working like a charm! USD also looks like it might be done its run, so could be a further tailwind for a rally in stocks. We're into some near-term/sloppy supply, so wouldn't be surprised to see a little profit taking ahead of cash close. Manage as you see fit!

Jon @ LionHart Trading