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Sunday, September 23, 2012

$SPX - Plunge into Early October

SPX managed to bounce from an initial test of the yellow fork last week.  This small bounce may not be quite finished yet. 

However, any rally attempts this week should be considered last gasps that will fail.  The result will be a plunge into early October.

The white trendlines represent short term downside targets.

60min Chart






Many leaders have underperformed from the May high, and this is an early warning.  RUT is keeping pace, but normally would be expected to outperform during a decent rally phase.  Notably, TRAN is already collapsing.  The conclusion is that SPX is currently trading in the late stage of a bubble, and the warning is clear for the months ahead. 
 
It is important to recognize that these relationships are more relevant to bigger picture views rather than short term outlooks.  Bigger picture charts are coming soon. 


Daily Chart



89 comments:

  1. I happen to agree that we are close to a major sell off on SPX. Major sell offs are hard to time... the market can remain irrational a lot longer than most shorts can remain solvent is the saying.

    I think the language you are using on your posts is a bit unhelpful to many people, especially new traders. You write: "The result will be a plunge into early October."

    That sort of language messes with people. You have stated for sure there will be a plunge in early October. Not that you suspect there might be, not that you are guessing it could happen... you stated for sure there will be a plunge in early October.

    It's great that you are confident but if one goes back on this blog it can be noted you have also stated on July 8th:
    "SPX is approaching the target at the red fork outlined in June 4th analysis.[Chart outlining an imminent drop to SPX 1240] The price pattern has worked well, and the topping process for SPX may take several more days to complete.

    A freefall is imminent."

    In other words 3 months ago you stated the same certainty that a freefall would happen in days. Not that you were expecting it, thought it might happen... but that a freefall was imminent.

    It messes with peoples minds. I think the last three months on this blog demonstrates you do not know with complete certainty what UVXY will do.

    Other than that I appreciate your sharing your opinions here for free. I hope no one takes them too rigidly though.


    ReplyDelete
    Replies
    1. I can understand your points although I feel it is important to be as clear and simple about the outlook as possible. Saying that "maybe" it goes up, down, or sideways would be much less helpful.

      Going back to July SPX did fall for 6 days in a row, and then after it fell for 6 days, I said that I felt it was bottoming, and would not follow through on the downside just yet.

      My work in this case is clear that, yes, it is likely to plunge soon.

      Delete
    2. Steven, i agree with your points. On the other hand it is ok to have strong convictions as well. The trick is - to have top notch money management skills. So when you call goes wrong, you get out with min. losses and go on.

      SC, seems to be doing ok despite his timing being off. So i am going to assume that he has excellent money management skills. Otherwise i dont see how one could have survived this fall in volatility.

      Folks, this is just the beginning of the madness in the markets, when big moves come a lot more accounts will blow up. This is how the cookie crumbles.

      Delete
    3. Yea and in the mean time watch your UVXY trade erode away...As much as 20% a month just "waiting" for the cookie to crumble...

      It's okay to lose 20,30, or even 50% in a few a days because you will make 200% when the market tanks, isnt that right ?

      Delete
  2. I am still waiting for a pop in the market this week to short. I think it is dangerous to chase after upside so this is why I am looking to short only.

    ReplyDelete
    Replies
    1. The best chance for a bounce this week from the cycle analysis looks like Wed/Thurs. Therefore, that looks like an interesting time to short.

      Delete
  3. SC, is this the start of the plunge or do you think we have more upside. thx

    ReplyDelete
    Replies
    1. Probably still early. The best spot for a bounce this week from the cycle analysis looks like Wed/Thurs. Therefore, that looks like an interesting time to short.

      Delete
    2. How long do you think this bounce will last and do you think we'll make new highs? thx

      Delete
    3. This week SPX may bounce Wed/Thurs only lasting a couple days. I don't think there is upside, maybe a double top.

      UVXY still could see that $26 level, and if that occurs I'll take a heavier than usual position for a run to the short term $43 target.

      Delete
    4. I think you'll miss the bear bus, SC. Trying to pick up nickels in front of a steam roller.

      You don't mind being hosed with big loses, but you are trying to save nickels & dimes in front of a big move?

      If you think a plunge is around the corner, why mess with a little pop (if any) ?

      Delete
    5. Well a move from $29 to a $43 target is pretty attractive already. However, the first week in Oct looks weaker.

      Delete
  4. "You can only afford to be wrong about the market if you’re NOT wrong about your risk assessment and money management. "

    SC, do you have very strict money management approach?

    ReplyDelete
  5. My last trade I took a loss at $39.30 on UVXY. I did this to be in a position to pick it up lower, which it has. The 3 trades before that were wins. Now I'm in an excellent position to buy at a low level for a run to $43.

    ReplyDelete
    Replies
    1. I'm looking forward to showing the overall results using this strategy as the bigger picture plays out.

      Delete
    2. SC, sounds like you are making money, despite what many here see as disastrous calls.

      So there is one huge difference between you and those who blindly follow you and lose money - its discipline and strict money management. This is where your 16 years of trading experience come in. You can afford to be wrong on timing because your discipline saves you when you are wrong. Perhaps this is obvious to you, but does not seem to be clear to your readers.

      Sorry, i repeat myself, but folks you see this? You should not be trading (especially VIX related instruments) if you cant manage your risk properly!

      Delete
  6. Hi SC,
    I guess the challenge for many is that we don't seem to be getting/winning with the small carrots for UVXY much less the bigger carrot for UVXY down the road to offset the sudden declines we have been experiencing to date. Thus, the readerships concerns.

    ReplyDelete
  7. I've been trading in and out of it short term but more importantly I'm more interested in positioning for the bigger picture. I think it will be much more clear what is the aim of my stragety once I show the big picture charts soon.

    ReplyDelete
    Replies
    1. I wonder where we have heard that before

      Delete
  8. Folks, also for the rest of you, remember the disclaimer on the front page. This blog is for entertainment purposes only! :

    "The ideas expressed on this site are solely the opinions of the author and are for entertainment purposes only. Any investment decision that results in losses or gains made based on any information on this site is not the responsibility of the author. The author may from time to time make statements about certain investment vehicles and strategies, but it is not to be taken as investment advice. Again, it is just the author expressing his opinion only. "

    ReplyDelete
    Replies
    1. are you his lawyer or something ?

      Delete
    2. lol im just pointing out the fact that people seem to forget around here.

      Delete
  9. hi SC
    are you saying you sold your 75% as well? or are you still holding 75% & waiting to buy final 25%?

    thanks

    ReplyDelete
    Replies
    1. I'm still just waiting for it to come down lower. Since I feel that we are nearing an extreme in complacency this time I'm going to build a heavy 150% position size for the move targeted to $43.

      Delete

  10. DOW

    http://traderjoed.blogspot.com/

    ReplyDelete
    Replies
    1. joed, i love quotes on your blog! thanks for posting them!

      "We would rather be ruined than changed;
      We would rather die in our dread
      Than climb the cross of the moment
      And let our illusions die.
      ~W.H. Auden"

      Delete
    2. AM

      Thanks.............I have been trading for over 35 years.............AND EACH quote means something to me in my journey into time......Best to you and every trader always! joed

      Delete
    3. joed, i understand what you are communicating here. most valuable pieces of advice. it feels like you are throwing life jackets in the water near the sinking ship.

      Delete
  11. Someone should cross reference his charts with an overlay of the actual UVXY price...You will probably notice they move in inverse direction..

    ReplyDelete
    Replies
    1. this is his opinion. can one man's opinion be wrong? yes. why keep following others mistakes? make your own! lol.

      Delete
  12. until 1440 , then 1420 breaks on SP 500 nothing is happening to VIX

    ReplyDelete
  13. intra-day support 1450 broken, now 1444 should be next..

    if crude oil climbs back up and SP bounces here, UVXY should close lower

    ReplyDelete
  14. hi SC
    I think that was our high for S&P this morning
    I loaded up on HVU @ 7.77
    did you load up yet?

    ReplyDelete
    Replies
    1. No, still waiting.

      Decent pop for UVXY today, but I'm not impressed. I'm going to wait until Thurs/Fri as I think it can come lower to around $25.

      Delete
    2. My SPX cycle is positive starting tomorrow and into Thurs.

      Delete
    3. So Thurs/Fri look like a goos spot to short imo.

      Delete
  15. VIX didn't do much on this move today and was quite a bit higher yesterday.

    ReplyDelete
  16. Vix up 2.5% and it didn't much....yet when UVXY goes down only by 10% it's called a higher low and it's played as being bullish...

    lets called it a Wedge

    ReplyDelete
  17. SC, i'm wondering why you didn't catch the move today by buying the low and selling the high? you keep missing the boat on these moves??

    ReplyDelete
  18. SC, are your cycles positive for tmrw?

    ReplyDelete
  19. let me get this straight.. your looking for UVXY to trade up to 43.. it trades in the 27's today but you want to wait and hope it drops another 1 or 2 dollars ???? you can't pick the absolute bottom ever if you think its going to 43 you should have loaded up maybe 26 never happens and you just missed move!!!!

    ReplyDelete
  20. 14% move in uvxy and your not impressed ??

    ReplyDelete
  21. I already own a large position in UVXY. I am looking to increase it to overweight on a retracement probably to $30's. The market confirmed down today. Still plenty of upside for UVXY to $43.

    ReplyDelete
    Replies
    1. So are you buying more UVXY on pulllback to 30 now, I am confused it was 28 this morning and you did not want them but you are buying more in 30's next.

      Delete
  22. Hey everyone

    why dont you all give SC a chance. Anyone can be wrong sometimes. He already stated that he will show his record at the end of this year. That is huge compare to other people blog's and charge site. There are charged site who doesnt even post that information. I am looking forward to it. Thanks SC

    By the way, for those that went to other people blog or charged site, ask the owner if they willing to share that record info. Most wont, especially the charged site, cause they normal get worst and worst after they start charging people lol.

    ReplyDelete
  23. I LIKE SC. InvestBB, you are right in what you say.

    ReplyDelete
  24. By the way, you people don't HAVE to visit this blog...If you don't like what SC is saying, why do you read what he is saying? This IS his blog, no? He is posting his thoughts for free, so take your bashing bullsh*t elsewhere.

    ReplyDelete
    Replies
    1. Isn't the whole idea of a comments section to put pro and con ideas out there?

      I mean I guess SC could put up a notice that this comment section is only for people who are in agreement with his viewpoint. That way no one would feel insulted... but then the whole idea of calling it "comments section" should be changed to calling it the "yes-man section" or "toady section," after all "reading this blog is voluntary" ... why bother with anyone with a contrary point of view. ;)

      Delete
    2. Different points of view are always welcome here as long as respectful.

      Delete
  25. Guys, I am actually finding SC to be a better trader than before, check out his patience lately?

    Yes, today UVXY went up. SC missed the boat, did he get hurt? Answer is NO. But guess what, UVXY can easily drop to the teens as well today, and SC could have load a big boat, did he get hurt? Answer is NO, not only didnt get hurt, but also safe a lot of money.

    This is money management. Dont know how long SC been trading, but this skill doesnt come from the beginning as a trader.

    ReplyDelete
  26. By the way, SC has every right to delete your post if he doesnt like it or forever reason. Maybe he was BORED. LOL

    I been to PAY site where the owner lock down the posting, and only allow post that benefited his PAY site. Dont forget, SC is offering this site FREE last I checked.

    ReplyDelete
  27. Hey SC

    dont know why you mention here
    "SCSeptember 25, 2012 10:35 AM
    My SPX cycle is positive starting tomorrow and into Thurs.
    "
    As well, you mention a good spot to short.

    Not sure if you already know or not, VXX/VIX product dont really have to follow SPX/SPY movement. Like they can both be red or both be green as well. You know about that right?

    ReplyDelete
    Replies
    1. You bring up an important point. I cover SPX as well as the volatility trade separately currently. Many prefer to trade S&P. There is a reason though why I am covering volatility also, and it has to do with my large cycles. I will explain why this is the case once I outline my bigger picture charts.

      There are other markets and commodities cycles that I follow that will become interesting in the future. For example, there is a nasdaq cycle that is going to be hot, a lot of action, and I will cover that when it is about to unfold. It has to do with cycles going back to year 2000. This is something I will discuss next year.

      Delete
  28. Just doubled my UVXY position and bought at $34.20. So now hold an overweight position.

    ReplyDelete
    Replies
    1. I thought cycles are positive until Thursday?

      "My SPX cycle is positive starting tomorrow and into Thurs"

      Delete
    2. Yes, there are some positive spots during the second half of this week for SPX. I would probably wait until Fri to short SPX on a retracement.

      In terms of UVXY it is not as clearcut. My thinking is simply that UVXY confirmed on the upside and there is good upside to the $43 target early Oct.

      Delete
  29. I already held a large position as of yesterday. My last buy was at $29.55 mid Sept when my cycle turned negative. Bottom line is that UVXY has a breakout, and the target is $43 early Oct. So there is plenty of upside from here to $43.

    ReplyDelete
  30. Hi SC, the large position is from the low 50s correct. Then you sold half for a loss correct?

    ReplyDelete
    Replies
    1. I had a position at $52, and sold half at $39.30. Bought 25% back at $29.55, and now bought another 75% at $34.20.

      So now I have a very large position with a confirmed bottom yesterday, and breakout for UVXY in my work. I could have been more aggressive yesterday, but already had a large position.

      So I don't mind to add more capital when we have a confirmed breakout and bottom, and good upside to $43.

      I plan to sell all around $43 early Oct.

      Delete
  31. I think UVXY will likely trade up and down in the $35 to $38.50 zone for a number of days now.

    ReplyDelete
  32. So what is your average price for UVXY ? (I hope you don't delete this post too)

    ReplyDelete
  33. Avg on all of this is $39. So upside on this trade is around 10% to my $43 target. However I may slip in a few trades in the $34 to $38.50 zone in coming days to increase my profitability.

    The last trade is the one that was disappointing but the 3 trades before that were all nice wins. So assuming this current trade works out well, I will have 4 out of 5 winning trades during Aug and Sept/early Oct period. Now this was during a rising market and using a highly leveraged etf.

    So in summary I can make small profits, or even just break even, with the strategy shorting negative cycles during a rising market phase.

    My large cycle suggests that the market is entering a declining phase in the market, and more importantly a period of high volatility. So then during a falling market phase, my strategy become very profitable.

    ReplyDelete
  34. Hi SC

    Thanks for all the info. Awesome Job.

    Looking forward to the big picture, you have an estimate date when you plan to release it?


    Thanks!

    ReplyDelete
    Replies
    1. There is something I have been waiting for to show the big picture charts. I want to show it at the right time. The charts will be released in Oct.

      Delete
  35. Just sold 40% of my position at $36.38. Will look to buy a possible dip to $34's.

    ReplyDelete
    Replies
    1. Congrats on the recent breakout....your patience was definitely tested recently.

      Do you think UVXY will backfill all the way to today's $32.89 gap before proceeding higher?

      Delete
    2. Thanks testy, it could backfill some more but I think the $38 to $39 is coming within a few days. So I bought already at $34.47.

      Maybe a little early, but it is still cheap at these levels imo...

      Delete
  36. There is short term resistance for UVXY in this $36 range imo, and the SPX cycle has some positive spots that I believe are starting soon. So that is why I lightened up there.

    I still hold 110% position and will buy back in $34's to hold 150% again.

    ReplyDelete
  37. Zig Zag is a super guy, and does great work with timing cycles.

    ReplyDelete
  38. Bought the 40% back at $34.47.

    ReplyDelete
  39. It still might retrace some more here, but next pop for UVXY could take it to $38 to $39.

    ReplyDelete
  40. All depends if sp breaks above 1430 again and tests 1440

    If not down she goes to 1420

    ReplyDelete
  41. SC

    I trade with a goup of traders........the main trader I work for is very seasoned and trades many time frames etc. But for me I am trying to be longer term .....can you show longer term charts? Tx

    ReplyDelete
    Replies
    1. There are times when the market is quiet, and the short term views are more important or profitable to trade. Then there are times when the bigger picture views become more important to focus on. The best traders know when to switch.

      I do have bigger picture charts coming, but actually in terms of timing I still think a short term view is better. Soon though I will make the transition to larger views.

      Delete
    2. I see what you are saying...........thank you for your CLEAR response! Tx!

      Delete
  42. I wonder how accurate these short term cycles are. There have been quite a few times where the cycle is positive but the market is negative, like today. maybe they are better suited for int/long term trading.

    ReplyDelete
    Replies
    1. I find overall they work over time. Defining exactly what happens on a certain day is tricky though because at turning points there will be both positive and negative cycles on that given day.

      Delete
  43. joed,
    in your opinion , has the correction in both stocks and precious metasl ended?
    thanks

    ReplyDelete
    Replies
    1. Hi phantom

      I have a 10/1 cycle low for this swing with a 1410 Dec Emini to this area for target.....and if you look at it this looks like a P3 wave ........so I am going now intra day to my 240 min and 3 to stalk entrance! I am sure I will get an entrance tomorrow but as I say there is still time left so my objective is continue to enter with the 240/3 min signals and get to break even and trail stops...this technique gives very low risk for large contract entrance! Here is my prior chart I have been posting with the update!

      http://traderjoed.blogspot.com/


      As far as metals I still have a 10/10 low to come in with a lil bounce here! Best and good trading! joed

      Delete
    2. ALso,,,,,,,,,,,as posted my LONG BONDS was exited (just turn Emini upside down) abd ny short Enini's have been exited today! But don't get distracted the BIG money will be made on the short side into the end of NOV...IMHO! joed

      Delete
    3. Great call on the top, I follow your blog everyday to see your charts. Have you shorted on this ramp? Do you have a price target for gold at the Oct 10 low? Thanks

      Delete
  44. joed,
    many thanks for your time.

    ReplyDelete
  45. SC,
    How are the next few days looking from a cycle perspective. Last i heard you thought today was positive as well and then ???
    Tks in advance...

    ReplyDelete