A proxy for the VIX that’s a great tool for intraday trading – get familiar with the UVXY

UVXY is often called a “proxy for the VIX” and can be an excellent tool for intraday traders who want to capitalise on volatility moves without trading VIX futures directly. In this video, we break down:

1. What UVXY actually is and how it differs from the VIX
2. Why it moves the way it does (contango, decay, and leverage)
3. How to read UVXY charts effectively for intraday trading
4. Practical strategies and tips for using UVXY as a volatility gauge

Whether you’re new to volatility products or looking to sharpen your intraday edge, this guide will help you get familiar with UVXY and understand when it offers the best trading opportunities. Watch until the end for real chart examples and key takeaways.

A proxy for the VIX that’s a great tool for intraday trading – get familiar with the UVXY

00:21

Introduction to VWAP and its variants

00:21

The speaker confirms that the screen is visible and begins discussing the SPY 10-minute chart focusing on a recent pullback. They highlight a key line representing the outer boundary of the VWAP (Volume Weighted Average Price) set to one standard deviation. The VWAP indicator shown is their own standard version, distinct from other VWAP types like time-based, moving average, and intraday versions. The speaker notes that VWAP is commonly available on many trading platforms and explains the reasoning behind developing their specific version.

01:27

SPY price action and buying signals

01:27

The discussion focuses on extending the functionality of a trading strategy to include additional variants. The key target price mentioned is 657, which has shown a significant upward movement. The speaker highlights the presence of buying interest indicated by candles with wicks at the bottom, confirming demand at certain price levels. Despite moderate volume, the price broke above a critical opening range candle, signaling a potential bullish continuation. The speaker advises traders to choose their approach—aggressive or conservative—based on their preference for confirmation and confluence in trading signals.

02:35

Price movement and volume anomalies

02:35

The speaker analyzes price action and volume patterns on a granular, minute-chart level, noting that although spreads are narrowing and volume is rising under certain candles, price movement is showing signs of struggle near key resistance levels. They highlight the significance of narrow candles with high volume as anomalies and explain that the current trajectory is expected to continue toward the R4 pivot level. However, due to congestion and resistance at this Camarilla pivot point, the upward momentum is likely to pause despite the current risk-on market environment.

04:28

Using VIX and UIX for risk assessment

04:28

The speaker discusses assessing market risk by examining the VIX, particularly highlighting a 9-day VIX for short-term traders compared to the standard 30-day VIX. While the traditional VIX lacks volume data, alternative ETFs like UIX serve as proxies for volatility. UIX is a leveraged ETF (1.5x) that moves quickly and is useful for intraday trading to gauge momentum in volatile markets.

06:23

UIX closely tracks the S&P 500 and SPY, reflecting risk-off environments when these indexes rise. Traders can apply standard indicators, including volume price analysis, to UIX for insights. The 10-minute chart shows rapid movements in UIX, which inversely correlate with market direction—when UIX falls, markets generally rise, making it a valuable tool for understanding global volatility trends.

07:32

Volatility patterns and market history

07:32

The speaker analyzes daily charts focusing on volatility, referencing specific dates like March 9th and notable market events such as Trump’s tariffs. They explain how price action shows a pattern where the market spikes and then gradually falls, forming a characteristic saucer shape. This pattern corresponds with political events that caused market dips, illustrating a rhythmic behavior in risk exposure.

08:41

The discussion continues on identifying risk patterns by comparing current volatility to past occurrences, particularly the sharp market fall and subsequent V-shaped reversal during the Trump tariff period in March and April. The speaker notes a recent break from previous congestion but mentions the fear factor isn’t strongly reflected in the market, as indicated by the UIX, which is used as a hedge or insurance by traders anticipating a major market downturn.

10:01

The speaker highlights how current market behavior reflects participant psychology and risk appetite, describing the situation as a managed decline with narrow spreads compared to the wider spreads during last year’s tariff-induced volatility. They express concern from a Volume Price Analysis (VPA) perspective due to the presence of particular candle patterns that suggest cautious market dynamics.

10:41

Market psychology and accumulation signs

10:41

The speaker discusses significant buying activity suggesting accumulation, hinting that April might be more eventful in the market than expected. They reflect on March, which was anticipated to be volatile but turned out to be less dramatic than feared. The possibility of April bringing surprises is considered, with speculation on whether current actions represent buying protection or insurance against potential market movements, emphasizing the role of volatility.

11:37

Introduction to futures trading and YM

11:37

The speaker introduces the E-mini futures for the Dow (YM), recommending it as a starting point for novice futures traders instead of the ES futures. They explain that the ES futures track the S&P 500, which includes 500 stocks across various sectors, with tech having the largest influence. In contrast, the NQ futures focus on the NASDAQ 100, also heavily tech-weighted. Understanding the construction and sector influences of these indexes is crucial for trading futures effectively.

13:26

The discussion shifts to the YM futures, which represent the Dow Jones Industrial Average consisting of only 30 stocks. These stocks are price-weighted rather than market-cap weighted, meaning the largest price stocks have the most influence on the index. Typically, six major stocks drive the Dow’s movement, making it somewhat simpler to analyze. The speaker notes they will cover the YM and the Russell futures in more detail in future sessions.

14:28

YM futures characteristics and trading tips

14:28

The speaker discusses the importance of respecting levels in trading charts, specifically referencing a 10-minute chart that incorporates both camarilla levels and daily perspective levels. They highlight how these levels lead to more consistent and steady intraday price movements, avoiding erratic and volatile fluctuations. The segment concludes with the speaker acknowledging audience questions and expressing gratitude for their participation.

15:43

Closing remarks and upcoming sessions

15:43

The speaker thanks the audience for joining and mentions plans to make the sessions more regular, aiming for once or twice a week despite other commitments. They conclude by noting that President Trump will be speaking at 9:00 p.m. local time, coinciding with market close, and sign off wishing everyone well.
By Anna Coulling – creator of volume price analysis

By Anna Coulling – creator of volume price analysis