I woke up this morning and the Q’s were down 100 points. I sold out. The Q’s volatility (VXN) was 39.32 up +36% over 4 weeks and up +69% for 52 weeks. Apple Vix is 64 up 55% in a month and 92% in 52 weeks. The Q’s are down 5% and Apple is down 6%. Apple represents an overweight part of the QQQ and the XLK (I also sold my XLK), This is an avalanche. I should have sold yesterday but I lost 1% not 5%. It’s only noon we’ll see what 4 pm brings. Overall I made 7% in a couple months on the trade and missed that turning into a 1% profit headed into the red. I now have my 7% available to compound (maybe even in QQQ once again when it quits falling). Buy LOW Sell HIGH, compound the cash get off the mountain the instant the avalanche is happening.
Gold is down 1.1%. GVZ (gold volatility) is 23 down -.04% for 30 days. This is not an avalanche. This is a buying opportunity.
Here is an interesting video on avalanche. The price represents the snow mass tumbling down the hill. The avalanche is caused by built up potential energy under the surface, being released all at once into kinetic energy as price action.