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Thursday, September 27, 2012

UVXY - Wild Swings

Careful with these swings!  There are currently very fast swings occurring in the VIX as panic and complacency gyrates from one extreme to the other extreme.  This is creating high energy movements in UVXY up and down. 

These wild whipsaws look like they are about to become wilder rather than calmer.  UVXY fell below the $32 level which is a concern, and suggests further downside could be possible. 

This could be the case even if it bounces in the morning.

At the same time, this unusual situation appears to be a major bottoming formation process.  Even with possible downside to near the area of the green arrow, the short term upside target remains at $43. 

30min Chart

48 comments:

  1. I am holding a large position currently, and will hold that position, and would add to it if UVXY comes down to $25 or so.

    I am putting my entire position in UVXY, and any additional purchases for sale immediately just above $42 (slightly below my $43 target).

    ReplyDelete
  2. I plan to publish my bigger picture charts this weekend. We are right at a major turning point in the markets now imo.

    ReplyDelete
  3. Hi SC,
    Thank you for the updated chart and warning.
    1.If UVXY comes back to about $32 this morning, would that minimize your concern of it possibly dropping further to $25's.
    2.Since it blew down past your 32 support yesterday, how do you know that the 25's is any stronger for support over the next few days? History seems to show that these cycles support/resistance lines aren't very reliable from what i can see. Yet somehow they work for you, so congrats on that part.

    Thank you for sharing your thoughts and trades with us.
    Tks in advance SC.

    ReplyDelete


  4. The problem today for UVXY is that my SPX cycle suggested weakness in the morning today (which we are seeing). However the cycle is still positive and this could carry into early next week even...

    SCSeptember 27, 2012 10:36 AM
    "I suspect a weak market tomorrow morning for SPX but a decent close going into the weekend.

    Serious weakness should hit SPX again early next week imo..."

    ReplyDelete
  5. $32's was very important imo, and because UVXY fell through that now $31's become resistance for short term. Not good for the short term.

    I think most likely it comes down to bottom in the $24 to $25 area. That is very strong support in my work. I'll show some more charts on the weekend why I see that being the case.

    Next week is a different story because the SPX cycle becomes very negative again.

    ReplyDelete
  6. UVXY bounced off purple fork on the early chart from yesterday. I do not like the looks of this bounce though. Most likely it'll drop again soon.

    I plan to buy big if it comes down to that $25 area.

    ReplyDelete
  7. Reduced my position in UVXY, and sold in premarket at $31. Now I am still holding a decent sized 75% position size but this is underweight.

    If it does make this move and drop down I will be a big buyer. I may go right up to 250% position size on a dip. That means I would be using more capital than my usual size of 100% that I use to trade UVXY.

    ReplyDelete
    Replies
    1. Even though a dip looks likely for UVXY short term, I also think that $43 target is likely to be reached in Oct.

      Delete
  8. i am sure this is a dumb question but how do you sell premarket when the market is closed?

    ReplyDelete
    Replies
    1. Many brokers can trade in the premarket but often need special instructions. Ask your broker how they handle premarket.

      Delete
    2. Same with aftermarket. There are only certain hours for premarket and aftermarket also.

      Delete
    3. I spoke to my broker....they will do pre/after market but only if you call them and at full commission versus online discount commission....
      tks.

      Delete
    4. Ok, yes many brokers handle things differently.

      Delete
  9. SPX looks like it could rally into Tues, then bottom falls out Wed imo...

    ReplyDelete
    Replies
    1. Around 1460 SPX Tues/Wed next week is a target.

      Delete
  10. There are 15 posts today. Three are from Testy and 12 are from you. This speaks loudly regarding this blog. Of course you will delete this, and it shows the character of the blogger.

    ReplyDelete
    Replies
    1. Yes, it does speak loudly. It speaks to how much people hate UVXY...

      That means complacency is nearing extremes, and that is why I am getting ready to buy UVXY big!

      Delete
    2. I remember when everyone hated Gold in the $200's. The central banks couldn't sell it fast enough down there. Gold was deemed a useless asset that collected dust in a warehouse at that time.

      Things change... Big profits come from going against the crowd.

      Delete
    3. "Yes, it does speak loudly. It speaks to how much people hate UVXY..."

      SC, unfortunately it has nothing to do with UVXY...

      Delete
  11. You have been buying all the way down from 120! Sure you took some for loss and nickel and dime it a few time, but your overall record can go all the way back to the 200s. Be honest with your self and your readers. Admit when you are wrong and look for the next trade.

    Same as last November. What happen to the 1040 call?

    ReplyDelete
    Replies
    1. I've been trading in and out since that level. I am waiting for the right moment to hold, and it is coming soon.

      Delete
    2. This comment has been removed by the author.

      Delete
  12. JoeD,
    I know you are bearish up until the election and that you went long yesterday for a day trade. How do you see the next few days unfolding in the markets starting with today?
    Tks in advance.

    ReplyDelete
    Replies
    1. Hi testy99

      Yes Iam looking for the main trade on the bear side........and yesterdays action fullfilled my thoughts into P4 as stated after the P3 posted on this smaller leg...I am still waiting for price into my window of 10/1 whcih would fullfill the P5 and target area posted! At that time I will be looking for a move up to produce a P2 on the larger picture and setup the move down! Best and good trading! joed

      Delete
    2. Hi,
      I don't see any P's posted on your charts....thus I am having a hard time following your words above. Sorry about that but thanks for trying to be helpful.

      Delete
    3. Testy99

      http://imageshack.us/a/img823/5278/17855986.jpg

      Delete
    4. Thank you Joe...I see the chart and understand it clearly. Thank you and good luck.

      Delete
    5. I will be watching Monday for a bounce up! Best, joed

      Delete
    6. Thanks for labelling your chart and your clear epectations JoeD. So you see P5 next to the 1420 cash level before the bounce?

      Delete
    7. ss76

      Not a rule just if it happened today it's always clearer and easy! My low date WINDOW is Monday so I will start to look aas we go now! BUT as sated my main interest is the coming short....Best, joed

      Delete
  13. Like I mentioned, be "HONEST" with yourself.

    ReplyDelete
    Replies
    1. you don't need to be honest when you can spin doctor it.

      Delete
  14. SC, so does your cycles indicate a bounce today into next Tues/Wed?

    ReplyDelete
    Replies
    1. Yes, bounce into 1460 SPX area Tues/Wed imo. The cycle is still positive into Tues/Wed.

      Delete
  15. It's not a good idea to buy and hold UVXY when the up trend channel is not broken yet (you want proofs ? 3 reverse splits since inception date of October last year). You may want to buy UVXY to take advantage of small dips here and there but a tight stop loss level should be placed and not a good idea to hold it overnight.

    ReplyDelete
  16. SC, I am going to stick with markets and Gold to DOWN until true reversal is spotted which will be strong. Not the first time I have spotted you on the wrong side. Hear a lot of talk for Dollar being at resistance these days! Dollar will show it's strength with one of the lowest number in percentage of the bulls on it. Vix will be seen to complete it's full STO cycle to go over 80. Whipsaw? Yes, direction? Down. Most likely 1422-1420 on SPX.

    ReplyDelete
    Replies
    1. I just think the market will rally into Tues/Wed then down hard. So generally I agree.

      Delete
    2. Thanks SC, you're doing a great job! I hope we all can catch the big rise at some point. Do you think we will hit 48 level on VIX at some point in November?

      Delete
    3. Dec.. My bigger picture charts are coming soon.

      Delete
    4. December is disappointing.....i thought from earlier posts that we would reach at least that by end of October...
      oh well, as long as it's higher by then, it's better than lower.
      Have a good weekend everyone...

      Delete
  17. ZZ's calling for a low Oct 4, so decline to that date...this should be interesting...

    ReplyDelete
    Replies
    1. My SPX cycle is positive into Tues/Wed Oct 2/3rd, and then turns very negative. So there could be a sudden drop in there Oct 3/4/5.

      Delete
    2. There is possibility for some weakness Monday imo. I'm waiting until Tues/Wed for UVXY.

      Delete
  18. $spx and $USD perfect correlation
    http://humblestudent777.blogspot.com/

    ReplyDelete
    Replies
    1. hard to give you any credibility since you change your views so often. It's easy to call the moves when the moves already been made, you can have two sets of charts and decide which ones to post after the markets closed.

      Delete
    2. If he made a mistake & you pull him up to it, he'll tell you that the subscription version is the correct & profitable one.

      He never made a mistake & take a loss, that's why he's the humble one.

      Delete