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Sunday, July 15, 2012

$SPX - Approaching Resistance

Resistance is just above, and failure is likely once again during the next several sessions.  The dominant feature of this week is the negative concentration in the cycle analysis during the middle part of the week.  Expect a sudden drop this week. 

The bigger picture is that upside is limited, and the current phase of whipsaws is nearly complete.  The 3 and a half month old bear market that began at 1422 SPX in early April is soon to continue much lower with the countertrend rally nearly complete. 

Big picture charts with bear market downside targets and timing for SPX will be presented shortly.   

15min Chart





140 comments:

  1. HVU/UVXY is already trading now on August month...are we looking to set for 2 point drop in VIX? ooouchhh...this is going to hurt big time...

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  2. Added another 20% of HVU at 2.02....Now holding 70% of HVU....

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  3. SC you don't think with HVU rolling onto August month the decay in this ETF will hurt our initial target ???? Any downside in VIX now and HVU is in the $1.50 range

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  4. No, because the VIX is going to spike. We're going to see a taste of that this week, but especially in Aug and Sept. The VIX is going to rocker higher.

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    Replies
    1. Slowly accumulating again. Similar to you I see some positive factors through Tuesday, but consolidation/weakness later in the week.

      The VIX is going to wake up soon and I can't risk not being on board at this stage in the game.

      Cheers SC.

      -Bicky

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  5. 17-19 July, SC will have proof. ??? We will see.

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  6. Better turn now my friends. Central banks are instructed not to let markets fall. This is the most critical juncture, and they're going to skew all the technicals that pointed to sell-off. This is not a free market.

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  7. At 7.13, who recalls the words,*not much downside at 12*...
    SC, your charts are fine, but your understanding of how the vix and uvxy works..needs some work. Making money is much more about timing than charting.

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  8. The longer whipsaw phase in SPX did result in UVXY dipping lower. However, the upside is huge. Though it was early, the timing is correct now. The market is cornered in my work, and it will go over the edge.

    I have plenty of patience for a big move.

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    Replies
    1. SC, has your target changed for UVXY? Thx

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  9. I hope for your sake you are correct. With Ben speaking this week, lots more potential downside for uvxy. Market's love a phoney excuse.

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  10. Unknown, I have to agree. SC, I understand your strategy however I think its fine for HSU or HSD, but not HVU. Don't forget that your big crash was slated for June 28th to reach 1245. HVU at that time had a high of $3.56. Now it is trading at $2. That is huge. The SPX on the 28th had a low of 1313. Now it is trading at 1354 and looking to push higher over the next couple of weeks with a pullback or two. For HVU to attain $3.56 or anywhere close to $5, you need a black swan event......the Olympics could be that event however like Unknown said, timing is everything.

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  11. My targets are the same, and are not going to change. The VIX is going to spike within days imo.

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  12. The first target for HVU remains at $7.45 Aug, and with a final target at $10.50 Sept.

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    Replies
    1. I think HVU is going to be reverse split this week??

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  13. As long as you hold true to your targets, and reference that comment come August, you will be a legend. Because June, got pushed to July, and now August.

    (And outlook being prolonged does hurt holders of these ETF's even if the targets are the same)

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  14. Don't you see what they're doing to uvxy. Spike down as spx moves up; sideways as spx sells off. This is the biggest scam product out there, and totally manipulated. A fool and his money are soon parted!

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  15. Yes, the current whipsaw phase took time to play out for SPX. However, my short term SPX charts have generally captured those moves well. The whole purpose of the short term charts for SPX is to fine tune the timing on the bigger picture bearish play.

    The big bearish SPX play is getting quite mature now.

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    Replies
    1. SC, will you be buying anymore UVXY? If so, when? Thanks

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    2. Yes, sometime during the next day or so. Will report when I do.

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  16. DOW..........

    http://img40.imageshack.us/img40/8867/dowr.jpg

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  17. SC, has the freefall been delayed?

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    Replies
    1. so far UVXY has been in a freefall, no delay there. Just waiting on SnP to catch up lol.

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  18. he mentioned that perhaps it doesn't happen till August now..

    that is the point. First June, then July, now August, all the while UVXY/HVU have tanked large.

    HVU beginning the last week of June when the first crash was predicted, $3.54, now, $2 (Used June 25th).

    HSD on June 25th $7.56, now, $7.24.

    You can see how holding HVU rather than HSD would have been a terrible idea.

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    Replies
    1. SS76,

      What is HSD and how it work?

      Thanks

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    2. The bottom figure I suggested for HVU was $2.60.

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    3. what is your new bottom figure for HVU? thx

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  19. We already saw one freefall phase last week with 6 straight down. The next one won't bounce at all until low 1200's. Very similar situation as last summer.

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    Replies
    1. When do you think this will start?

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    2. Did you mentioned you agree with Zig's outlook? Yet you are looking for a free fall?

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    3. SC, its been mentioned before, your S&P call hasn't been too bad, but UVXY didn't co-operate with your S&P analysis and as such any holders of it are getting spanked royally.

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    4. VIX usually start to pop before S&P. VIX spikes this week imo. That is the initial spike.

      Delete
  20. SC,
    I think the concern is that UVXY has continued to freefall (even when SPX has been falling) and not turning up as expected.

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    Replies
    1. Does anyone have a good explanation for that? Right now $VIX up 1.2%, SPX down, and UVXY down 4.4%.

      Its been doing that pretty consistently lately. SPX down, VIX up, UVXY down, VXX down, XIV up.

      Or SPX down big time, VIX up big time, UVXY flat.

      Or SPX up, VIX down, UVXY down big time.

      Delete
  21. So bounce until tomorrow, and the big negative cycles starts on 18, right?

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    Replies
    1. S&P has bounced already. I am expecting some declines this week.

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  22. *not much downside at 12*

    Wow...that's almost a 50% free fall.

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  23. My work is in agreement with ZZ's timing cycle in my opinion. I think the ZZ timing cycle will continue to work well.

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    1. no it doesn't SC. ZigZag has the market making a higher high Aug 9th area, then dropping no lower than the June 13th time frame (roughly 1327), and then rocketing much higher into Sept 25th.

      http://zigzagcycle.blogspot.ca/

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    2. The cycle is for timing. ZZ's cycle is excellent for timing, and is close to mine for timing turns.

      SPX has put in lower highs since early April.

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  24. Watch how market tanks now....

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    Replies
    1. Currently, it's bullish consolidation on the SPX from last weeks surge if we continue slightly down we should expect 1 more surge higher up to the upper pivot trendline...

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  25. Quoting some Guru's comment. it really makes sense. I guess the UVXY will "eventually" take off. Everything goes up must go down. Everything goes down must go up. I am more talking about this sense in relative time span. Let's do not deny UVXY will eventually goes to zero if no reverse split. At least we have to be honest to ourselves based on nature of the product.

    But whether we can rid this up or not is really up to everyone's risk/loss tolerance,Pain tolerance and Capital tolerance. Some high twenty might have hard time to see even in this round of drop.

    http://seekingalpha.com/article/720821-volatility-players-treacherous-gaps#comment-7417701

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    Replies
    1. Thanks for that link, it explains a lot.

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    2. yes, it says any UVXY longs since the 12's are in doo-doo unless the VIX jumps really soon....

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    3. Yup, even VIX jumps, due to VIX term structure. UVXY will not go very fast. It becomes an elephant due to steep term structure. That would test more patience from us. I guess you two are on the same boat as mine. GL

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  26. VIX is going up but not HVU...or HVU is still on July month?

    Thanks

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  27. SC, you seem like a very well intentioned guy, and if it was just your losses at stake here, no problem. The problem lies in making statements of certainty(12 is about the bottom..now 7.13 IS the bottom), a myopia that doesn't provide balance thus luring many to great losses on the hope that someone knows the future better than themselves. I've seen this so many times...it hurts to see again. If Ben comes out with positive statements tomorrow, though ludicrous, this thing could see 6.50 easy. Praying for all you longs.

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    Replies
    1. He certainly is well intentioned, but I've warned him about using words like "crash", and such before as that has always been my sorepoint. At any rate, I think Bernake will likely give bears a lift as he will have nothing new to say and the market won't like that.

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    2. SS76, it's nothing I'd have a loaded position in uvxy riding on. He is the man that moves these markets most. Last week CNBC posted an article, +markets would be 50% lower without Fed intervention*. These are the Fed's markets, and Ben pulls the strings...until he doesn't.

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    3. I've been abundantly clear that the trade I am doing is designed to capture a big move in the market. At the entry points I am in, the upside is huge.

      I will be patient to take my profits. I have always been clear on these points.

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    4. Yup, you have, just providing balance. Believe me, I really hope this works out for you! I may buy HVU for a quick flip tomorrow...

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    5. SC, with all due respect, if you were that certain about the outcome your short term position would not have mattered, yet you sold and are repositioning after making such declarative statements previously. That's my only point. These bear etf are just designed to go to zero, they're designed to be manipulated towards zero.

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    6. I am not repositioning at all. I pointed out correctly last Thurs the SPX bottom at the orange fork line.

      I felt the probability of a bounce for the market into Tues was there, referenced that many times, and that was correct.

      The bigger picture is very bearish.

      Delete
  28. will this back fill after August roll over? next two days is very critical...

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    1. Stockboom, the HVU product rebalances DAILY so the roll over is a constant concern, not just at a certain point in time although at expiry they do act more volitile.

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    2. agree but since august is higher then july by $2, it makes huge impact, that is almost 10% decay in vix and 20% decay in HVU/UVXY product by just roll over..

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    3. Well, to be precise, it is 10% decay over one month, that is 0.5% decay every day, well manageable given day trade. The person sold option needs to make buck or two ;=) The worst case is VIX stays flat or goes down. That would hurt people holding it month or two. I have been holding three weeks, and got 30% hair cut. You never know you would know until you put hard earned dollar on the line. I knew the decay, and SnP going down, but did not prepare VIX stay flat. Lesson learned.

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  29. SC.. you said there was limited downside in uvxy at 13... its down 40+% from there.. spx dropped 6 straight days and your uvxy is LOWER... your stating that your calls are correct but your sitting on HUGE loss in uvxy, your problem is you have never admitted you were wrong... you were expecting a vix spike and it has NOT happened so you push out your calls a couple weeks... meanwhile alot of people have followed you on this and are getting crushed. If vix does not spike this week what is your plan?

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    Replies
    1. Dont think he ever ask people to follow him, so no need to put that much pressure on SC.

      Do agree on the push out another month tactic is getting old.

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    2. MICK

      Anyone following anyone deserves to get crushed....maybe that is the only way they will learn there is NO cheat sheet! Do your own work! c

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  30. Today was an inside day on both the vix and spx. That means tomorrow will be a big move one way or the other.

    Tomorrow will key off Bernanke. In my opinion he will say he stands ready to do whatever it takes to assist the markets. The spx will lift higher and spike to 1359 or 1370 area.

    That will be the end of this 3 year rally we have seen. On Wednesday the market will start rolling over and head down and we may get to 1320 by Friday, but we will be headed to 1200 or lower probably in 2 weeks.

    This scenario would be a similar pattern to last years summer market decline.

    The only problem with this pattern is that tomorrow may see 6.50 or less on uvxy when factoring in the futures roll tomorrow. In my opinion, tomorrow will reach the maximum draw down for uvxy.

    I am writing this partly to prepare myself because if it does follow this pattern it may not be pleasant tomorrow but would be a great thing because of the pattern correlation with last summers market sell off.

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  31. I'm in for the big play as I have always said was the point of my trade. The first target is at $28 and $40 is the maximum in my work for UVXY.

    The cycle work is clear using many different methods.

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  32. We will see 1390 on the SPX before any significant downside...

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  33. The negative cycle for SPX start up tomorrow again. It's been working great.

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    Replies
    1. Hi SC

      Just thinking, this negative cycle, pretty sure we just had like 6 days of that bloodbath, but UVXY is at all time low after the bloodbath. Do you see this to finally change?

      For all the HVU holders, Anyone planning on holding their HVU over thursday and friday this week?

      Thanks!

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    2. The VIX is set to spike during this negative cycle imo.

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  34. SC - the fear is palpable, at least going by many of these comments. Now if it could only make it out into the market as well...

    Know your limits and play within it. It's even more true with this market. Good luck to all still hanging in, and especially to SC given the current climate of these posts. Bonzai!

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  35. Unique blog SC. One of the few that I read regularly. Today we had a Heikin Ashi Gallows with an MACD Kiss in conjuction with a 4 day TNA print sequence that resulted in a big down day. http://instigator928.blogspot.com

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  36. SC, are you forecasting a breakout or breakdown on 7/17-19?

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  37. I really empathize with you SC...how many times can you say the same thing??? why don't they get it??? how hard is it??
    listen people...his is a "cycle" system..I don't know the nuts and bolts,but cycles work off of time,not just price...believe me cycles don't always happen on time,but they happen...I learned a new word end of june...inversion...still kikin' my butt, oh well...when VIX spikes and UVXY pops...you guys better not type one word saying how you knew it would or never a doubt or always had faith in ya SC...cause you don't...apologies better be all that's on this board for a couple days...SC ROCKS!! GL..

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    1. The comments are a reflection of how strong the spike in the VIX is going to be. Wild move coming!!!

      Cheers!

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    2. Stock...noone says it won't spike. If you're one of those that bought in the 12's based on *it's near the bottom*, you've got a lot of catching up to do, and your profits, if they come, will be minimized. If it wasn't for my belief we'd see one more retest here on spx, I might be in that position. Frankly, I wish some black swan would occur to apply enough force to overcome the controls central banks have, which is most, but not all.

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    3. I hope for those that are in UVXY, that SC's forecasts come true shortly. GLTA

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    4. stockyard262! Nice post man....... Can't said any better then that. Some people here are so retard, no wonder they loose so much money... STOP IS YOUR FRIEND PEOPLE!

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  38. What moves this! Didn't find out
    Good news UVXY goes down
    No news UVXY goes down
    Bad news UVXY goes down
    Market up UVXY goes down
    Market down UVXY goes down
    VIX up UVXY goes down
    VIX down UVXY goes down
    Contango UVXY goes down
    Decay UVXY goes down
    Lost a lot, thank goodness

    GTLA, ;+)

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    Replies
    1. m-a-n-i-p-u-l-a-t-i-o-n...folks here just don't get how criminal these etf's are

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    2. No, there is nothing wrong with the etf.

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    3. Hi SC

      how are you so certain?


      Thanks!

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    4. SC--

      I must say, this ETF is not for the feint of heart, and judging by some of the comments here, many could use a little more fortitude : }

      I started layering in again today and I noted that you were planning on adding the next day or so.

      Looking at my charts we are still in the channel. Tomorrow we could spike down to as low as $6.00 and still be in the same channel (if we get to $6.00 I am adding HEAVY for the first time in awhile).

      Do you have a target price you would like to add at, or are you playing it by ear?

      I'm thinking $6.00-$6.50 would be a gift, but I'm not certain we go that low.

      I hope you make some money and that people give you the proper respect you deserve.

      Thanks for taking the time post your thoughts and for creating this forum for us to Bitch (er, discuss) this wonderful ETF :}

      Cheers Sir.

      Let's get $28!

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    5. InvestBB,

      The etf is trading exactly in tune with the VIX futures as it should. No manipulation whatsoever.

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    6. Any price is good there is no downside and huge upside. My SPX cycle is going to turn negative tomorrow.

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    7. There does seem to be a general expectation that things would turn for the worse. As soon as Bernanke dashes hopes QE3 at least for now, things will go south very fast.

      http://www.zerohedge.com/news/its-different-time-scariest-equity-market-chart-around

      Delete
  39. I would buy UVXY between 6.6/6.7 to 6.2

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  40. Futures heating up for Ben....

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  41. I wish your spx cycle would send the memo to the spx futures, because they are flying higher

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  42. Excellent, on Thursday I said SPX rally into Tuesday, and then the cycle turns negative again.

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    Replies
    1. SC --

      You've said the same thing since last week.

      Look people, you might be down, but look at tomorrow as one of the last few times to grab some shares.

      Don't sell at the bottom.

      If you you were in too deep and have had some painful experiences the last few weeks -- keep it small and add slowly next time.

      If you are fine holding larger positions through the swings, do it again!

      Delete
    2. Your absolutely right, bicky... ! Remember people! You didn't lose nothing til you push that sell button.. I smell bull trap. With in days or heck, might even tomorrow.... we could finally see that shooting star conformation I've been waiting on... Either way I have been buying a lots put buying for Aug. and Vix's calls. I can't wait til how it play out...

      Delete
  43. "Thursday I said SPX rally into Tuesday, and then the cycle turns negative again."

    How has your readers benefited? Watching the UVXY dropped like a rock?

    Looks like a GAP down tomorrow, possibly in the 6s.

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  44. That was why I posted on Thurs rally into Tues. That info was for the benefit of the readers. SPX, and UVXY are correlated.

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    Replies
    1. For those of you that are in a bit deep right now and are uncomfortable, please remember Bicky's wise words above which will help you this time around (hopefully the next few days will relieve some of the current pressure) and for future trades.

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  45. I want you all to listen to Sherm mcClellan, originator of the McClellan Oscillator. At the end he states the VIX is now below 20, and should stay there until Nov./Dec. Do you realize what that will do to UVXY? Time to wise up here longs.

    http://www.mcoscillator.com/download/special/2012-07-13_MarketViews_McClellan.mp3

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    Replies
    1. eh, be careful putting too much stock into that. I think the VIX could spike large at perhaps 3 time frames. Either it will happen on the RLS turn date as per SJ July 27 - Aug 3rd. If not, then I would target Aug 9th as a short term top, and if not that then expect end of September, around the 25th (the last 2 dates correlate with ZigZags chart). I am more likely to think that the RLS date has the most opportunity for the pop, as the Olympics could provide the fireworks the VIX needs.

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  46. so the cycle turns negative again on Tue or after Tue?

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    Replies
    1. Today it turns negative. I am expecting SPX to hit the resistance lines shown and fail.

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    2. Resistance looks like 1365 according to your chart...correct?

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    3. Resistance starts at the red line at 1361. The top line is around 1366.

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  47. Bought UVXY $6.92 overweight position now. SPX hitting resistance and the cycle turns negative today.

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    Replies
    1. The VIX is due to spike this week.

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    2. SC, how long does the cycle reamin negative? When does it turn positive? Thanks

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  48. VIX daily hanging right on lower tl...oh the suspense.

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  49. SC, how far are you down after taking big hit fully stacked in the 12's, 10's, & 8's? I think it's only right to not only dispense your oninions and charts, but your successes and failures off those charts.

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    Replies
    1. My avg was in the $10's, but I did lighten up last Thurs at $9.04 when I felt that SPX was putting in a low.

      Bought this morning at $6.92. So yes I am down on paper a fair bit at this moment. However, I am trading according to my plan with targets at $29, and then up to $40. I expect to do very well when all is said and done.

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  50. First attempt above 1361 - failure. Let's see if it tries again a little later.

    This is kind of fun - when you believe you're on the winning side of the trade. Yee Ha!

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    Replies
    1. Yes, failed at the red fork 1361.

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  51. The short term SPX cycle is very negative this week. There are positive spots next week.

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    Replies
    1. it doesn't sound like the rise to $28 will be a shooting star now as originally thought...it sounds like it will take the stairs up to $28...am i interpreting this correctly? tks in advance.

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    2. Will the volatility etf's come back to this level next week during the positive spots?

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    3. we're all still waiting for the uvxy to have it's initial pop....:)

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    4. I am expecting volatility to spike this week, cool off again next week - probably a fairly deep retrace. After that then volatility gradually rises first, then the acceleration phase. The first target is $28 Aug.

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    5. Thank you ...just for clarification...what August date are the cycles expecting the $28 to be reached by ...ie. Aug 7th?

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    6. Late August the target will be low 1200's on SPX and $28 for UVXY.

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    7. Any targets at the end of the week after this sudden drop?

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    8. I'm going to look at short term target for SPX low some more.

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  52. Ben speaks after mid day to the media...that is when we'll know more..bought HVU at $2.03 although a bit late on it, hoping to sell it around $2.10

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  53. No QE for now...and the VIX does nothing...

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  54. Hi SC

    wondering if you have a target for HVU and UVXY this week with the spike? and a target with both on this deep retracement?


    Thanks!

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    Replies
    1. I still think $10ish then should cool off quite a bit with deep retrace. Could even see $7's after, then the major move up.

      Delete
    2. We'll take the short term movements one short term cycle at a time, and it will be more accurate that way.

      However, I am not an advocate for short term trading during this phase of the bear market. Short term trading was a great strategy during the whipsaw phase of last few months. With the market soon to trend lower, it is time to think hard about shifting strategy.

      Everyone wants to know what the next whipsaw is for the SPX, and exact timing, and we are going to look at that, but this is not what is important.

      What is important is that the market meltdown is coming shortly.

      Delete
  55. Late August now... classic

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  56. Hi SC

    After this spike, would you consider XIV to capture this deep retracement?


    Thanks!

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  57. Markets are down about half a percent and VIX futures are marginally down. Does not look like the markets believe Bernanke any more. QE3 is coming at some point in time and that keeps the hope alive and markets levitated with volitality expectation down.

    I can't belive that I am saying this but BTFD!

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  58. Ok, VIX futures are down 0.30, and s&p is down 3 points. Why? The VIX futures ETF's are not tracking the S&P futures properly at all.

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  59. SC, just an FYI, once you get over 100posts, I get an error message for the script to stop loading....apparantly its too much data when this gets too big.

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  60. SC, how much more downside could we see in UVXY/HVU it seems nver ending..

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