A major zone of resistance has built up above now.
15min Chart
Wednesday, July 11, 2012
$SPX - Yellow Zone Tested
As expected according to previous analysis the yellow zone is being tested for SPX. Bounces were rejected at the oranage fork. On a short term basis there is some support at this level. Therefore, another phase of consolidation could be in order next.
A major zone of resistance has built up above now.
15min Chart
A major zone of resistance has built up above now.
15min Chart
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I suspect may just grind along this white line here for now as has occured in numerous interactions in June.
ReplyDeleteHi SC:
DeleteThanks for supplying your analysis.
A couple of posts ago you had UVXY basing in the $8-$10 range until about this time, and then a very sharp rapid rise. Based on the chart above, it seems like you no longer believe in the case for an explosive pop in the UVXY -- at least at this juncture.
Are you seeing the same pattern, just delayed, or have things fundamentally changed?
I understand UVXY gets the most of it's gains towards the end (panic), but the recent performance of UVXY during 4 red days makes me think there is still some juice in this market to test the consolidation zone, and perhaps pop above to suck in more bulls and punish the "easy setup" bears.
Believe me, I hope UVXY pops as much as the next guy, but just trying to prepare myself for the opportunity to lower my average cost if it presents itself.
Cheers,
Bicky
We've dropped in SPX but it can flatten out here again. At this point we are still in the slow grinding phase for UVXY. This phase could last longer. I am still expecting the same end results.
DeleteThanks SC! :}
DeleteI don't have the stones to hold one large position through the chop, but will continue to add slowly.
Good day.
Do you have an event window for the next downward leg? If I'm reading your chart correctly, it indicates this could happen anytime between today and next Tuesday - or could the fall actually wait until late next week to happen?
ReplyDeleteI'm going to wait and see how things shape up next few days. To me it just seems the market may flatten out here at this level again.
DeleteThere are negative cycles coming up this week and next week also.
Thanks for the update, and thanks for sharing with us the fruits of all the hard work that's evident in your analysis. We'll know soon if the trends are aligning as they should.
DeleteGood luck to all.
If it keeps grinding along the white line, then the "July drop" will become the "August Drop". Is it me or does you analysis just seems like its gets pushed further in the future if it doesn't work out ?
ReplyDeleteSC, is this no longer a freefall? Do you think that the 1245 target has been delayed from your previous analysis? Thx
ReplyDeleteI'm going to wait and see how things shape up next. It is possible that could be delayed if the markets flatten out here again.
DeleteSC, I've read that next week hvu will be reverse split...what are your thoughts on this?
ReplyDeletenever really see a good thing from reverse split, look at UVXY reverse split before and current price.
Deletegl
I've never seen a reverse split having any impact on performance before/after. It is a non-issue.
DeleteReverse splits are a factor to consider with individual stocks but not etfs because of the way they are structured.
DeleteThanks for your reply
DeleteThe reverse split is important. These ETFs are designed to go to ZERO, thats right, ZERO. Its right in the prospectus. They are only good for day trading and that is why timing is so important and I have concerns with SC's approach of buying and holding, but that is my opinion and everyone does what they feel is best for them. For me, I prefer to trade it, but am much more cautious about buying and holding for 2 - 3 days only when the trend clearly has reversed. We don't have this yet, and judging by what is happening with the SPX right now and this being an election year, I suspect we rocket to 1380 leading up to July 27th, and that turn date is when we tank to 1250 or so.
Deleteso to continue my thought which I got off track, although the inherent value of your shares is the same after the split, and to SC's point the target percentage gain is still the same just dealing in higher numbers, the fact that it is where it is over time will grind its way back down to $2 and an eventual reverse split in time.
DeleteSS
DeleteDont know about this turn date, but if this snail movement in SnP doing nothing much this week. Holding HVU will get eaten alive by decay...
Thanks!
When is the Fed meeting due?
ReplyDeleteThanks
I think minutes will be released @ 2pm est
DeleteThanks
DeleteThe question is, do these etf's decay faster at higher levels post split then they do before? Other than that question, there is no greater risk after a split with these. With individual stocks, orchstrated shorting efforts kill price post split; when tracking any index, not so much.
ReplyDeleteThe split has nothing to do with the decay. The amount of decay has to do with the movement of the market itself. If the markets are swinging violently then there is more decay. Quiet market and less decay.
DeleteIt seems every analyst out there is forecasting a push up to the highs from July 3rd before the markets turn down...but wouldn't this just give everyone the perfect opportunity to short the market?
ReplyDeleteKen Fisher, the famed fund manager and Forbes columnist, points out that once everybody is in agreement that event A is going to happen, it increases exponentially the probability that event B (or C or D) happens instead. That's when people can make the most money from the markets...
ReplyDeleteshould we sell our position to stop losing more money? Serious.
ReplyDeleteLooking at the probabilities, with 5 red days in spy, and now the selling slow down, VIX still not above 20, in fact VIX is red right now. NYMO is close to neutral from overbought. It favor a snap back. We may drop later, but that is to be seen
Deletecalm before the storm?
ReplyDeletehttp://humblestudent777.blogspot.com/
SPY = 20DMA>50DMA cross over today.
ReplyDeleteLast 2 crosses were in late october 2011 and late december 2011. Chances are we rally if 20/50 support levels hold.
also important late july 2011 cross, followed by reversal and dump, cross was on falling 50DMA like now.
DeleteDYODD its your money... for now.
SC
ReplyDeleteWhat do you think about the odd behaviour of VIX and VIX Futures given the negativity in the markets?
I would have thought that 4-5 days of down markets would perhaps take VIX over 20.
Thx.
SC, gold is not getting any fear trade bid instead it simply follows the main market.
ReplyDeleteThere is still no fear out there. The VIX warming up but not hot yet. May suggest some more consolidation.
ReplyDeleteNDX particularly weak today, but SPX hanging in there.
ReplyDelete1370 - 1380 is the next stop. I'd imagine that would be terrible for Vix futures. I sold HVI today at $9.60 avg and rebought HVU at $2.38, only to sell at $2.44 and rebuy HVI at $9.41.
ReplyDeleteJust going to ride that out and position for the fall which will come later this month I think...
i am position for that as well. looking for a quick bounce at least...from all that red days.
Delete@SS76...You must have super low commission rates to be actively trading at those levels
ReplyDeletei want to be his broker ;p
DeleteCIBC $6.95/trade
DeleteThe UVXY decay during this consolidation is disappointing. I'm looking forward to this UVXY firecracker igniting really soon....
Deleteout long, in short
ReplyDeleteWhat we have here now is complete BS...this drop in VIX is not real..can't believe that VIX rise only few cents when market tanks 100 points and VIX drop $ 1 when market recover 50 points and still closes red....
ReplyDeleteI think this is a game to kick out retailers out of VIX play...and I am sure they will able to do it with ease...
there is just no fear in the market...hence no QE...may change product soon to something like TNA/TZA which follow the market movement better.
DeleteSC, what are your thoughts on todays action? Do you think we go up from here to test the highs from July 3, chop around this area or continue down? Thx
ReplyDeleteFor now just sideways shuffle.
DeleteIf we have the sideways shuffle/up market over the next couple of days, are you fine watching UVXY make lower lows? It seems to me that if UVXY breaks 7.90 this baby is going WAY lower.
DeleteI've been adding in small increments, but it's amazing how quickly even relatively small positions can accumulate large amounts of red with this vehicle.
We are still in the descending wedge, but if we are going to test the bottom portion of the wedge we may very likely see $6.50 or so in the next couple of sessions.
Hi SS76
ReplyDeleteKnow you are with CIBC, with this HVU split. You plan to sell it just before and buy it later? cause I think CIBC dont adjust the shares until a few days later or even up to a week to match the correct number of share you suppose to have.
Thanks!
I certainly wouldn't hold my shares through the split as I experienced with HND and was stuck for 3 days unable to trade them.
DeleteSC
ReplyDeleteIs it possible that u are right in your snp target but vix never rise?
Thanks
well SC...you did it!!! UVXY slid sideways all day and the last hour plopped right on that upper TL of that falling wedge...a backtest perhaps??? any rate what charts I am following look same with setups and backtests before the the "give up"...tell your crew to buy some patience and let things work out...GL GREAT WORK!!!
ReplyDeleteHi Stockyard,
DeleteI'm not sure how in the world you are drawing your descending channel, but we are still in the channel. There is no "back test".
Tomorrow top is around $9.30 and bottom is $6.75.
Would share if I knew how : }
it's a descending wedge but if you draw your top trend line from 6-4 $24.09 touch 6-13 $19.50 then down to 6-28 $12.45 on down...broke out yesterday and last hour today retouched trend line at $8.26 ish... on UVXY hourly chart. hope that eliminates any confusion...
DeleteStockyard...I go the same thing...no room for downside as it is sitting on the downward channel.
DeleteWho knows, guess it can be open for interpretation. I am drawing mine similar to SC according to his as well (last post), we are definitely not over the top line.
DeleteAnyhow, whatever.
I hope we get some panic selling in the near future; if we don't I will continue to add slowly.
You guys who are comfortable going all in and simply waiting with patience amaze me -- maybe one day I'll be that confident.
The goal here is to help each other make money, and discussion can only help the collective consciousness.
Thanks to everyone, especially SC, obviously.
-Bicky
Give SC a moment to breath guys...
ReplyDeletespx drops 45 pts., uvxy still near low. lots of opportunity lost.
ReplyDeleteExactly ! Since July 3rd compare the SPX to HVU or UVXY. These ETF's are down 20% plus even though SPX has been trending down. Unless there is massive fear, I almost can guarantee that HVU or UVXY will not reach it's targets month at all.
ReplyDeleteHi SC
ReplyDeleteDo you think next time is best if we go for TNA/TZA instead of VIX? Then wait near the end before switching to VIX product?
Thanks!
There are always ways to optimize things for sure, though I still see UVXY going wild when it is ready.
DeleteThe VIX is "quirky". It tends to start moving up slowly and then spikes all of a sudden. Same for UVXY.
ReplyDeleteMost likely may see some support for SPX soon for a few sideways days. SPX trading just above the orange line. Maybe a short term bottom today/tomorrow, some sort of bounce into Mon/Tues.
ReplyDeletewill you sell today/tomorrow then your UVXY?
DeleteThanks!
It could only be a small bounce/sideways. Let's see how it plays out here next.
DeleteTrue. I have seen the VIX jumps 10% in matter of minutes. Lets hope it's soon.
ReplyDeleteSC, based on the performance of UVXY relative to th SPX the past few days, has your targets changed or does it remain the same? Thx
ReplyDeleteStill the same.
Deletewith a flat red wave A-B-C, yesterday's volume indicator bearish cross is pressuring down and taking a toll on the market.
ReplyDeletehttp://humblestudent777.blogspot.com/
SC
ReplyDeleteCan u please explain logic of market rebound after each big drop without any rational?
Thanks
I would say it's manipulation. I think the big boys are trying to suck everyone out of the market before they let it drop enough so they get the QE they are all hungering for.
DeleteSPX bounced exactly at the orange line.
ReplyDeleteSCJuly 12, 2012 7:21 AM
Delete"Most likely may see some support for SPX soon for a few sideways days. SPX trading just above the orange line. Maybe a short term bottom today/tomorrow, some sort of bounce into Mon/Tues."
SC
ReplyDeleteAre the targets dates and times still valid?
In this case my target remains the same though the timing is subject to constant review. The best chance for the markets to bounce comes from tomorrow to next Tues. Then the cyles I use are weak again.
DeleteLooking like a pretty strong reversal here. I wouldn't want to be too bearish near term.
ReplyDeleteThere is possibility for weakness tomorrow, but from fri to Tues the bulls have the best chance for a bounce on this decline so far imo.
DeleteSC
DeleteYou sold your uvxy position? Or thinking of selling?
Thanks
SC,
DeleteTagging onto Stockboom's question...at what point will you give up on the UVXY position by selling it if not already sold. Basically, if your statement is my target's are still good but the timing is questionable, then the natural decay increases the probability of this being a negative trade and thus there needs to be a stop out # to preserve capital.
At this point we have 6 straight days down for SPX. Obviously the momentum for the market is deteriorating. I'm not that interested in speculating on short term gyrations since that is not the reason for my trade.
DeleteThere are more negative cycles coming next week as well.
Thanks for the reply. It sounds like you are confident that UVXY will eventually react to the SPX declines....
DeleteI'm confident in what UVXY will do. I'll take it one step at a time.
DeleteHi SC
Deletewondering how you go about take it one step at a time, when you already all in? you plan to add more in the future?
Thanks!
I just mean that while the market could see a bounce or sideways soon, there are more negative cycles coming in next week. So I will review these cycles one step at a time as they come in and the results in the market.
DeleteSC
ReplyDeleteWouldnt you this rebound as bounce? We have been seeing this bounces as soon as market drop more then one percent.
Thanks
Interesting, there are buyers for Aug VIX options 50-60. "big buyers" looking for "crash protection"
ReplyDeletehttp://www.youtube.com/watch?v=o26kShB8240&list=UU83RU3yDhHwzG9d9LD1x5yQ&index=3&feature=plcp
Hi SC
DeleteCan that be buyer of call or put option?
Thanks!
SC, this could be a part of a normal hedging strategy, very likely in fact. Does not mean anybody is expecting a crash. Its just if you have, say billion dollar long (for instance), you'd need a lot of protection!
ReplyDeleteDo You have a hedge for your VIX play?
I think the next few days will be really tough for holders of any volatility etf's...
ReplyDeleteyou would think
DeleteQuite a bounce this morning....hopefully it's just a head fake and will come back down this afternoon.
ReplyDelete