It is important to emphasize that spikes in the VIX are characteristic of bottoms in the market. Not only that, but the market bottoms tend to last for a while afterwards.
The bottom for SPX should be within only a few points. SPX is set to rally very strongly off this low for a 2 week period. Interestingly, the final spike for the VIX in June is anticipated to correspond to a higher low for SPX.
Daily Chart
Below is the chart from April 29th:
April 29th:
"The VIX chart originally shown on March 29th worked well for April. Currently, there is high potential for a large spike up in the VIX. Complacency is high."
Daily Chart
Detailed charts will be ready tomorrow for both XIV and UVXY.
ReplyDeleteI'm targeting 1372-75 in 2 weeks time for SPX.
ReplyDeleteThen a steep dip, but higher low in June for SPX.
DeleteSC where are you expecting Gold to go the next few weeks and June? Also what are your thoughts on QE3 in some format and the effects on your SPX prediction?
ReplyDeleteI'll do some fine tuning later on Gold targets, but $1700 looks about right for June. I see excessive fear developing in June. This will spike the VIX and also light up Gold and Silver.
DeleteMuch of this will likely have to do with Greek fears.
This is a strong rally setup for a 2 week run in SPX. Then, things will turn choppy again in June.
DeleteThe Fed probably is starting to head in the direction of QE3. We have seen weakening economic data, and now weak markets too.
SC, thanks for the thoughts. Do you have a twitter account also?
DeleteI haven't done much with twitter yet.
DeleteThat red line may provide support for VIX next week, but it will likely come down lower in 2 weeks. Retracement to 19.50 to 20 area for the VIX.
ReplyDeleteSCMay 14, 2012 7:46 AM
ReplyDelete"The cycles are turning positive and look promising for a much stronger market this week. We're also seeing indications from NDX and RUT already in advance."
So what happened?
Refer to my prior post
I did call for the waterfall move in late April, and my charts captured most of it. Rather than last week, my expectation was that the market would be weaker during other time periods.
DeleteI'm not really sure what that means but ok.
DeleteIf you refer to my prior post you will see that I took the other side of the market strength call and have captured about 65 spx points.
Your work and effort is admired, just wonder why it doesn't work in terms of timing.
As a trader only two things matter to me............time and direction.........levels come into play later but the first two are the key to making money. Entry and exit.
Wondering if maybe there is a way to refine it?
My cycles and timing worked to capture the move down from 1404.50, and 1326 was the target mentioned. My work was still bearish overall, however the timing did not suggest the drop specifically timed for last week.
DeleteFor sure there are ways to fine tune it though it still worked ok.
The larger cycle was still down, but it was a spot where it could have bounced on the way down - should have just stuck with the larger cycle.
DeleteSC said:
ReplyDelete"I have seen the 87 pattern, and no it does not fit with the current situation. I am bearish later in the year, but we will test the highs before that occurs.
We always have to be careful with fractals because while they look the same on the surface the end results are different."
Hmmmmm................................
http://img16.imageshack.us/img16/2597/spx872012.png
Are you bullish or bearish now?
DeleteClosed 50% of my shorts at Friday's close because they were up so much and that is my rule going into a weekend.
DeleteWill let my indicators tell me what to do with the rest come Monday.
ZIG
ReplyDeleteWhat year is your chart based on..............and can you comment on why you picked that year? As always thanks in advance! gj
That chart is from 1967. There is a cycle that I discovered back in 2011 that is in alignment with 1966-67 and 2011-2012.
DeleteYou bought UVXY in 13's watched it go to 12's and then sold in 14's ...then you bought XIV whick you are way underwater on. So yes you were right with your waterfall call however you did not have conviciotn and instead of doubling up on UVXY you sit in a XIV loss. Those are the facts.
ReplyDeleteThe larger move is still yet to come in June as I will outline next.
ReplyDeleteThe reason I'm relatively pleased is because with the market confirming my waterfall pattern, I have a good plan going forward. My pattern showed the waterfall and it shows what comes next.
This pattern will work for a long time.
recently you sold uvxy in 14's and said you were expecting uvxy to go into 9's before large spike in vix. This did not happen you missed entire vix spike higher Uvxy went from 12 to 24 in less than three weeks. You were right with original call of vix to 28 and you did not follow your call
ReplyDeleteUVXY was at 14ish last Friday, it gained $10 in 5 trading days. What a rush I had riding this. Honestly, VIX is like a snowball, it will keep rolling bigger unless it hits a tree (FED intervention), I don't think IMO we will see UVXY back to $14 anytime soon...the short interest in it is just too high and the shorts have just started to cover..I think it might reach $36 sooner than we all think..and XIV is a terrible choice at this time when things are so volatile, its decay is huge. It was at 20+ when TVIX was at its low back in June, this April the highest it can get to is 13, with TVIX at 6.
DeleteHi SC: any detailed charts for both XIV and UVXY...thx
ReplyDeleteYes, this is going to be great! Nice action in this market.
Delete