Sunday, April 10, 2011

$SPX - Complex Top

Before the market opened on Friday, I had mentioned that the bottom should fall out of the next dip based on a short term symmetrical pattern.  I was referring to the following complex topping pattern.

The tops are symmetrical, and also the time is equal to either side of the cycle line.

15min Chart

$VIX Update:

My previous analysis indicated that VIX should form a triangle prior to a major spike up.  The triangle has formed, and the breakout occurred on Friday.  Notice that both light blue lines intersect at my cycle line.  In my view, this further confirms that I have the symmetry correct. 

Watch the light blue line and red arrow!     

60min Chart


  1. Sc,

    Do you think gold will fall with the market?

  2. It does seem that gold could fall. Perhaps dramatically. I think gold is near a major top.

    Long term, it is clear to me that gold has very attractive upside, but near term I don't see the case for much higher gold.

    There is a potentially bearish pattern in place on gold that I am seeing, and I'll show some views on gold tomorrow.

  3. SC - in my view technicals of markets looks very bearish if we get a follow through to the downside early this week.

    I would like to see below 1320- or below 1300 THIS week , if not I would give the bulls the ball and we might see new highs and then 1400+ is possible.

    But for now it looks very bearish with the VIX - TZA and other reverse looks very bullish.

    Look at VXX chart the volume decline as VXX drops , but big volume buys last month and looks like picking up again.

    Time will tell what the catalyst will be - but technicals looks pretty bearish to me today.

  4. SC- that would be great! I am a big gold and silver bull, 75% of my trades are just in silver futures. I would love to see you opiniion and analysis on precious metals.

  5. The freefall seems unavoidable just looking at my cycles, but it will be helpful to see the next few days. Timing is more of a question.

  6. Some stocks falling,but several are essentially we have a "wash" with a slight upward bias. The VIX is a big problem falling another point today going back below 17.That needs to get well above 20...and stay there.Right now...the conditions for a major selloff are simply not in place.We may just drift slightly up or down thru OPEX at this rate.

  7. VIX is very interesting this morning. It is back in the triangle and I wonder if it needs to hit the lower line once more before it rockets. It tends to make these spiky moves, and then snaps the other way.

    VXX is much firmer than VIX. It is diverging, and I take this to be an extremely bearish sign for the markets.

    So it is likely just a little early yet, but the warning signs are mounting with every day.

  8. Vxx has a great hrly pattern that breaks up on a close above 29.2. I have an order lower and hoping it doesn't run without me.
    I was hoping for just a bit more dip on the dollar
    Fas is looking ready to breakdown also

  9. Do we take out the Friday low by a few points, but then see a stronger bounce...

  10. Friday's SPX low I should say.

  11. looking for a bounce now? It wil push us way out of your target timewise if we bounce. I feel like we will continue higher if we bounce again

  12. Thanks Doug, yes financials have struggled and led the way lower.

    Let's see how it goes Blake. What I had in mind was more of a quick spike up that collapses fast. It's a whipsaw zone here for the time being. Watching closely.

  13. SC well it still all looks corrective - but at least we are moving down. But what I think is 1320 SPX is some good support - if that level holds and we move up from there we might see new highs , but lets hope we plunge further

  14. Generally it looks to me could see a little lower tomorrow morning, but I agree, it does still seem a little early.

    Financials are starting to firm up.

  15. I'm not sure whats happening here,but some stocks are taking huge hits here in the last 2 hours. At the very least some serious 'distribution'. If you're short AAPL or NFLX, are very happy. The SPX is taking a good hit too though on very few points down on the DJIA. As I'm typing we're only down 8 pts on the DJIA...but by looking at the rest of the'd think we were down 80. Maybe today "is" the start of a down trend.Still a tough 'read'...but I'd say the chances of us blasting 'up' have been taken off the table for a while. If tmrw(Tues) is a big downtrend day...we could be on to something here.We'll see.

  16. SC I still remain short - but tomorrow we need a BIG push down below 1320.

    I know some who think if 1320 holds we might see 1350 next , but according to the daily charts to me looks like we could get a nasty roll over tomorrow.....but time will tell

    Right now I am seeing good buys in SPY

    But remain heavy short still, also with CNBC waay to bullish about earnings..

  17. Bears really need to move in tomorrow - if we dont get below 1320 tomorrow I will most likely bail out shorts and go long - so tomorrow is critical to show up , but lets see if SC is right with a slowly move down and then big fat move down, maybe tomorrow

  18. I will be watching 1312 area. If bulls can hold the cash market there and then take out the recent highs they will have a good shot at 1400.
    There sure are alot of ugly charts tho..