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Thursday, January 17, 2013

$SPX - Scary Dip Soon

SPX rallied to near the upper red target area in price.  It could overshoot that estimate still, but the Sharp Rally Phase is due to complete soon according to the Deja Vu Cycle.  The Deja Vu Cycle will not pinpoint an exact top, and frankly it is just not important.

What is important is that the Cycle suggests that this market is extremely expensive, and a major downturn can follow completion of this Sharp Rally Phase.

A scary dip could occur within days to near the green target.

60min Chart

67 comments:

  1. More detailed charts coming this weekend with February outlook.

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  2. SPX could be slow for a couple days, then "out of the blue" take a hard tumble. Which day I'm not sure, next week most likely.

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  3. well, good luck for next week.

    I think many have short positions since 1455/70, and most seem agreed that the first target is the low sp'1440s.

    There is the lower gap @ 1425, but that just seems out of range, not least if you consider the channel on the daily charts.

    I hope you are right.

    Its a 3 day weekend, so..enjoy the break!

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    Replies
    1. I do think it'll dip suddenly, but then rebound quite strongly from this dip too.

      Thank you, best to you as well!

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  4. Hi SC

    wondering if you have a target for UVXY for this scary drop coming up?


    Thanks!

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    Replies
    1. I'm thinking $16's although will be fine tuning that next week.

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  5. good work SC
    keep it coming, i always check the commons under your blog

    if i knew how to post pics, i would share my point of view along with yours

    check the moving averages and MACD, TRIX for vix
    history may repeat itself

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    Replies
    1. VIX can spike soon. It is forming a configuration that can spike. Not quite mature but getting there. Next week sometime I think.

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  6. Nice to have some company looking for that scary pullback.

    My scary pullback takes us a bit deeper - down the the inflection point where we either spike bottom or complete a Deja Vu Cycle crash. ;-)

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    1. It should a spike dip, rebound, then Feb can see a deeper drop imo.

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  7. It will certainly be scary. I posted a number of charts and will show near term targets soon. I have also posted the likely projected path for the s&p until mid June.

    Timethetrade.blogspot.CA

    So I'm with you SC, just not on UVXY.

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    Replies
    1. I am curious as to why you are choosing to short RUT? It is one of the stronger performers out there at the moment. RUT is way above the Sept high. Money is flooding the small caps as the large caps GE, IBM, etc are not performing well.

      That has been the case since Sept, and I take this as a sign that the market rally is mature, but yet those small caps could still run.

      NDX, the Nasdaq is the weakest.

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    2. are you using trading days to align SnP correlation? If you push the top out to late January - October bottoms become misaligned. if you align them by october bottoms then the top was due in late december. We can see now that correlation is breaking down IMO.

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    3. The correlation can diverge as it did in the beginning of 2012. However in the big scheme, the correlation can be off 2 - 3 days. I chose the RUT because I think its got the best chance to break down, and I think it will lead the rest. When things seem strong, is when they typlically fall apart. A Downgrade on the US will hurt the RUT the most so that is my reasoning. Plus the TA indicators are suggesting to me anyways that the RUT is overheated and going to correct nicely, ultimately 9%-10% by March I think.

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  8. SS76, what is it with new blog, you also going to invite people and then offer them subscription? LOL

    If that is the intention then might as well advice them in advance...that is more creditable...

    Just a thought

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    Replies
    1. I actually replied on my blog to that exact question. It will never be subscription, never.

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    2. Honestly, I want the Market to pay me, not regular people like you and I.

      Delete
  9. SC, you said that your target for SPX is 1025. When do you think your target will be hit ? Thanks

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    1. Generally there are certain events that the Deja Vu Cycle predicts next. Test of the red trendline looks possible for Feb. Then there is the following "quiet period". I plan to estimate the timing once in the quiet period as that should be more accurate.

      It would be months in any case at this current pace.

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  10. "It would be months in any case at this current pace."

    1 monnth, 2 months, 3 months...

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  11. Each phase I look at distinctly, and one step at a time. Simply, once the Sharp Rally phase completes, then the Cycle predicts a decline to test the red trendline.

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  12. SC, you cannot use UVXY as a trading vehicle. This is dangerous and people will lose their shirt on it. Just look at it with the SPX down 4 points, it was down like 5%, not to mention its recent fall from grace (if you can call its previous state grace).

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    1. That is what makes a market - difference of opinion.

      I would not choose to short RUT. If anything makes a blow off top it would be RUT imo. Why short the strongest index?

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  13. UVXY oh man this is soooo bad

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  14. are you still confident of bounce with uvxy dropping to 11's? do you plan to sell when market dips to 1440's?
    thanks, sc

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    Replies
    1. I might sell on a bounce, but don't feel it necessary either.

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  15. I've always said if you do the opposite of SC you will make money.

    HE is Already down 20% and counting.

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  16. Yes, I am confident and will post when I take profit.

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  17. i am gonna need a market crash to get my money back......dam

    they extended the date for dept ceiling.......dam!

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  18. SCJanuary 16, 2013 at 11:02 AM

    "The market is quiet currently, that could continue, and VIX could come down lower as a result. My large scale cycle will not pick expect tops or bottoms as I have always emphasized."

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  19. So even another 20% pop in UVXY will only allow you to break even after holding for weeks...That's not great trading philosophy to have...

    Unless you are thinking that UVXY pops 30-40% which is VERY unlikely.

    Overall you might have the right idea, but I feel your timing is WAY Off...

    There is no sense in saying "I told you so" when SP drops to 1440 and UVXY near your entry price.

    I really do wish you are on the right side of this, but I'm afraid the decay and slow grind will make you lose your shirt.

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  20. The difference is that I'm in the minority and not using a short term trading strategy. That is my trade, and I don't mind being in the minority at this time.

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    1. UVXY and TZA are both short term trading vehicles, yet you are using them for a longer term strategy?

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    2. There are examples such as TVIX which has the same structure as UVXY in terms of VIX futures. In 2011 it did rise 700% and trended higher for months.

      So yes it can be held for periods of time in some situations. Other than that most of the time I agree completely it is short term.

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  21. Differences in opinion should be valued and are always welcome here, as long as respectful.

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  22. SC, you may not short the strongest market (RUT) but instead you would buy a trading vehicle that will make you lose your shirt.

    We bought on the same date (you UVXY and me TZA).

    You are down 17% and I am down 4%.

    Which do you think has the better chance to make their money back? While both are losing money at the moment, which trade was smarter?

    Sure, there is a small chance that UVXY breaks out, but that may not even be breakeven for most people. You need at 17% upside move to break even. Wow. I need the RUT to lose 1.33% to break even.

    I'll stick with mt TZA trade any day. I agree though, difference of opinion should always be respectful and I respect that you allow these on your blog as do I.

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    1. No, I'm short SPX as well as UVXY. I believe UVXY will do just fine with time.

      As far as the indexes your RUT is down more than a short on SPX.

      Not to be argumentative, but this is a good time to discuss these things. Again, RUT is the stronger performer. NDX is the weakest.

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    2. I don't take you as being argumentitive at all.

      The RUT is also showing signs of being overbought and has been for some time, and only once in the last 3 years has it hung around as long as it has in these extreme levels and the bounce back is usually quite strong. Also, knowing whats ahead is also a factor and no doubt a major factor for you and your UVXY position.

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    3. I like to discuss and debate these topics as well.

      I think the tide will be going out soon for the market. In a falling tide, all boats go down including RUT. However, RUT could be a candidate for a blow off top short term, and may not be as good performer to short on the way down. I just mention that.

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  23. SC to be taken seriously you have to show proper money managment and to let a position drop 30% is insane. If UVXY drops to 8 will you still hold. When you purchased at 14.50 a stop at 13.50 would be acceptable you can always buy it back.

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  24. Again this is my strategy. I realize it may seem strange, but, no, I am not picking bottoms or tops. It will be evident soon why I doing things this way.

    SCJanuary 16, 2013 at 11:02 AM

    "The market is quiet currently, that could continue, and VIX could come down lower as a result. My large scale cycle will not pick expect tops or bottoms as I have always emphasized."

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  25. This is not about tops or bottoms its about an instrument that may drop 30% more, you could be right and spy could drop to 1400 and take UVXY up, but if UVXY is at 8 and goes up to 13 guess what you lost money and you would have been right.

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    1. I am confident I will make money. It is just that simple. I'm not doing any short term trading.

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    2. How confident were you last summer when UVXY dropped 60%? I believed you maxed out on it?

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  26. I sold my UVXY for a 10c profit on Thursday. I thought I missed it when they rallied to 13.26 but look now....11.56!!!

    This stock is for intra-day trading only....anyone holding this stock & hoping for a 30% rally needs to get out of trading. The stock decays over 10% per month.

    If you can make 50c or so on this stock intraday then you have done a good job.

    Sleep at night.

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  27. Obviously I'm very pleased to be positioned in tune with the Deja Vu Cycle. I'm positioned short near to a major top for SPX and major bottom for VIX as the market transitions from bull to bear market.

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  28. VIX is at 7 yr lows. anyone who thinks it will stay there needs to have their head examined. Lots of criticism for SC whenhis position is down...but critics silent when SC called for VIX drop/market rally on Dec 28.

    I also held XIV in june 2011 @ 17....within 3 months it was at $5....when VIX explodes wont be pretty. In meantime i hold both UVXY & XIV.

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  29. VIX plunged today on debt ceiling rumors...scary drop can happen as early as next week after Senate kills another republican bill on spending cuts.

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    1. it is so ridiculous.....shifted into mid apr, was looking for a short term pop....and now theres a broken support down on vix chart....if the $12 do not hold, might be seeing high $10s

      SC, since the debt ceiling has been extended into apr, do you have a time scale top for SPY?

      on my chart, i do see there is a good chance for spy rally into 150 zone, and it is pretty bullish on the monthly and weekly chart by looking at all the indicators.

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    2. The debt ceiling has not been extended. There will be a vote on that next week.

      I have a series of charts coming later with a plan for next week and February outlook.

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  30. The bill, which would grant a three-month debt limit extension, also includes a measure to push Congress to pass a federal budget by 15 April.

    wasnt it should be solved by end of FEB?

    if wasnt the extended rumor, what caused today's plunge on VIX?

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  31. Debt ceiling agreement was reached July 31, 2011... A week later the markets crashed.

    Even if agreement on debt ceiling is agreed to, There still can be reprocussions... Downgrades and bond dumping.

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    1. Exactly, I doubt the US actually defaults this year, but would not rule it out either. The country should never be in this debt crisis, and that is bad enough.

      Regardless, my work involves cycles. The large Cycle predicts a bear market and extreme volatility this year period. That is regardless of debt crisis outcomes.

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  32. so what is going to happen in march or april

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    1. Bear market according to the Cycle.

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  33. i mean the debt ceiling news

    dont understand the news now........

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  34. The US takes in more than enough tax money to pay its interest, Social Security, military pay and some left over, without borrowing. So, the only way we default is if Obama wants to default.
    The debt ceiling will be raised, but the Republicans in the House are using it as a bargaining chip to slow the rate of borrowing.
    Obama believes in the Paul Krugman philosophy - debt doesn't matter to a country like the US.
    Of course, they are crazy, but if you look at Japan, who has been borrowing to keep their economy going since 1990... it can go on a long time. I think Japan has only a couple years left before they find out it can't go on forever.

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    1. I agree, but have to be wary of the FED

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  35. Updated blog.

    SC, it somewhat aligns with your view of a scary drop, but also have be cognizant of some Elliot wave folks are suggesting along with the CIT team.

    www.timethetrade.blogspot.CA

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  36. Looks like VIX in big trouble and RED!

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    1. Hi Stockboom

      mind share where you seeing this?


      Thanks!

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    2. Look at HVU.TO, a similar instrument to UVXY, down 5% today.

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    3. yup, down another 5%....although not sure how this is possible with VIX futures being closed...

      Either way, not a good sign for UVXY.

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  37. This comment has been removed by a blog administrator.

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    1. Wow. Are you for real James? There is no room for emotion when trading. You can't take back what you just wrote... talk about lawsuit material! Please refrain from threatening the life others when they are trying to share knowledge and you fail to speculate at your own risk. I don't think I've seen one contribution from you on this board. Keep to yourself if you have nothing of value to add.

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