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Tuesday, January 1, 2013

$SPX - Taking it to the Limits

SPX took it to the limits of support, and managed to almost miraculously firm up, and held well on Monday. 

While the S&P futures came reasonably close to testing the critical red trendline on Friday, SPX held quite well comparatively.  SPX regular hours holds more weight rather than the futures in this analysis.

This week will be important for confirmation of the next short term movements within the bigger picture Cycle.  The Deja Vu Cycle suggested a move up to the green minimum target at least, in both scenario's, with potential up to the red maximum target area in the more bullish interpretation.   

The Deja Vu Cycle demands that taking appropriate precautions going forward is wise.   

30min Chart

 
Volatility ETF's were trading strangely on Monday.  It appears to be a fairly extreme short term example of a "fear bubble" that suddenly popped. 
 
Possibly the size of the drop on Monday for UVXY hints at the bullish scenario for SPX playing out. 
 
60min Chart
 
 


62 comments:

  1. SC My friend, Have a happy and exiting New Year! If I play this and hold longs up until 1462 on S&P cash, what would be the date I should be holding it until and be very careful after? Thanks!

    ReplyDelete
    Replies
    1. Happy New Years Tushar!

      The big Cycle is mature in time for the high. So it's really just a quick move to a high. January 4th is a date that I'm considering for a high. Let's see how things go the rest of the week, and will have a better confirmation on price and timing.

      I believe there are very large moves coming this year!

      Delete
  2. Happy New Year SC!

    Are you expecting a surge from Dec 31 to Jan 04 all the way? There will then be a good entry point (in the low teens, maybe) for UVXY?

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  3. Jan 4th does show up on some cycles so that makes it an interesting date. I think the market can run some more. Give it some time and then UVXY will setup.

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  4. SPX may spend a week or so around the next high as it finishes the Sharp Rally phase.

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  5. Well, I sold XIV at $18.27 (High of the day no less) and bought SPXU at $35.62, essentially shorting the SPX at 1553. i'm comfortable there, my correlation chart shows the downtrend either starting now, or from Jan 12th but the downside through to March 4th is targeting 1320 - 1300.

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  6. Hi SS76

    curious to know why you didnt short the thing with UVXY? but with SPXU instead. You think you get better gain with SPXU.

    how about TZA?


    Thanks!

    ReplyDelete
  7. Well, thought about UVXY, but it is such a dog that I've seen the only VIX products you are safe with are the XIV/ZIV's rather than HVU/UVXY.

    Just look at the charts! Everytime this rolls over, its another opportunity for HVI.

    So yes, I think SPXU is safer as even if the markets decline or stays sideways, UVXY can decline also so really not worth the risk most times. May look at UVXY closer to the debt ceiling time around Feb 15.

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    Replies
    1. How about TZA? Isnt small cap usually leads?


      Thanks

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    2. TZA looks like a good bet here.

      Delete
  8. SC you were looking for 1430 resistance, then raised it to 1440 resistance... whats your new higher resistance

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  9. well, I stopped out of SPXU at $35.67 (my breakeven after commission), and rebought at $35.09.

    Was tempted again with UVXY but that dog keeps tanking after market!

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    Replies
    1. VIX is below 15, in the 14 ish...wow what a crazy couple of days for VIX. We are almost back to last Sept high, only less than a few points away.

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  10. Obviously we have the more bullish scenario in play with SPX running on a sugar high. This is the bullish surge from Dec 27th analysis.

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    Replies
    1. Hi SC

      we are like so close to your red cycle on your chart above LOL, it not even funny how accurate it is if we top out here lol.

      You think we go even higher than your cycle red area?


      Thanks!

      Delete
    2. It suspect we flirt with the Sept high, or even exceed it. I sure would not count on it though. I really want to see the momentum slow before shorting. I also think we spend a week or so near the high. So no rush to short at this time.

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  11. Sc, what is your long term target price for uvxy ? Thanks

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    Replies
    1. Best opportunity for UVXY is probably around Jan 12 - 14.

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    2. I have big picture charts coming soon with measured targets for SPX, VIX, UVXY. My Deja Vu cycle, 5 year cycle etc all suggest a big move. I have a lot to say about volatility during large cycles.

      Delete
  12. Swapped SPXU at break even $35.09 for TZA at $12.31

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    Replies
    1. also set stop at my buy price to be safe.

      Delete
    2. Thanks SS. Seems there is a decent chance for a dip today. Sometime soon can dip about 15 points.

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    3. I think the high comes after that though.

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    4. I Agree. I stopped out, but the RSI on TZA is 26, so its really oversold, I don't think it will stay there long so looking to reload.

      My 2013 goal is tight money management and very rare UVXY purchases.

      Delete
  13. Just as previously noted -UPWARD this week, and we even got more than anticipated. 2mrw's OPEN should offer one of the best shorting opps since August 2011.
    Jay

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  14. hey Jay, what do you mean by 2mrw's ?

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    Replies
    1. reloaded TZA at 12.23....if it bounces from here, will set my stop here, otherwise will sell if it reaches 12.15.

      Delete
    2. changed my mind...I'm holding for a couple days at least.

      Delete
  15. Hi Jay, what do you know that we dont ?

    ReplyDelete
    Replies
    1. You need to subscribe to his site. Jay knows it all from what others have told me, I don't know him personally nor have I subscribed to his services.

      Delete
  16. Hi SS76,
    Do you think it's a little earlier to buy TZA? maybe tomorrow afternoon or next week are better changes to buy TZA.

    ReplyDelete
    Replies
    1. It could be, but I believe the risk reward here is good enough and don't want to be greedy.

      The RSI is at 25.78 so a bounce is due, the KST is also at extreme levels and as such is sloping up to a positive convergence, etc....

      Either way I should make money on this trade, not great at picking the perfect spot.

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    2. My model is clearly suggesting that the market is really expensive up here. Having said that it has a lot of short term momentum behind it. That means it will likely spend some time up here. However, the bears time is coming imo.

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    3. After the topping process completes, the model suggests a test of the red trendline. Late Jan that would be about 1380ish SPX.

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    4. Hi SC

      Not understanding this bears time is coming mean, even hitting 1380, isnt that a large pullback? basically 100 points from this level. I would think bears time meaning at least 200 to 300 points drop.


      Thanks!

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    5. Once the topping process is complete the next short term target would be around 1380.

      That is just a short term target for January. I have big picture charts coming with measured targets for the first half of the year, and wait until you see them!!!

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    6. I have a low in early March around 1300 - 1320, before taking off to new highs...

      Delete
  17. SOFTWARE NOTICE...JUST A HEADS UP!

    http://traderjoed.blogspot.com/

    ReplyDelete
    Replies
    1. Joe, looked on your site and see your TZA chart...

      What are you thinking for a next move on this one?

      Delete
  18. If the jobs data is good tomorrow, which I suspect it will be, combined with the comments from the FED minutes that many think QE will well before the end of the year, I think the market will sell right off. I'm positioned for it with TZA and I think its a hold for a few days. My stop is set at $12.25 (mental stop). My target for Tuesday is $13.30

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  19. Dipping.

    SCJanuary 3, 2013 7:37 AM
    "Thanks SS. Seems there is a decent chance for a dip today. Sometime soon can dip about 15 points."

    ReplyDelete
  20. According to ECRI, recession may have started in July 2012. Of course the market and the economy are different animals.

    Just reminding to keep in mind that with the market marching up on a sugar high, things aren't as rosy as they may appear sometimes.

    http://www.businesscycle.com/

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  21. SC,

    Are you familiar with Gann's 60yr cycle and what it potentially means for the lows we are making?

    ReplyDelete
    Replies
    1. why don't you share 'what it potentially means for the lows we are making' with the rest of us ? Surely it's not a secret, is it?

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    2. My forecast and cycles are gloomy for 2013. Having said that, I do see very positive spots coming in the years ahead. So I'm certainly not saying that this is the end of the road, or anything of that nature.

      We have had many rough patches since 2000. This year is just likely to be another rough patch albeit it looks particularly nasty this year.

      Delete
    3. SC, like I previously suggested. Have one page strictly dedicted to long term charts, and a seperate page dedicated to short term. It makes you transparent and easier to follow.

      Your blog though, do as you wish of course.

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    4. Yes I agree that it is a good idea to keep the short term and big picture charts and discussion separate. I plan to make changes going forward.

      Thanks again.

      Delete
    5. I'd also have a "Current Position/Trade History" section so readers can see what and when you make your purchases in real time, and where your stops are. Again, helpful for transparency and credibility IMO.

      Delete
  22. firm stop set, $12.23, break even

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    Replies
    1. stopped out TZA $12.23, will look to reload a bit lower, maybe $12.10.

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  23. VIX getting hammered today again. UVXY still hanging in there today, but I think it'll follow VIX lower even if delayed.

    One thing I am waiting to see on UVXY is low daily volume. Too much volume for UVXY daily is a sign of hot money chasing it imo. I will buy it on low volume when it is "boring" and complacency high.

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  24. The behaviour of VIX has been very unusual this week. The only prior examples occurred around 1987 and around the flash crash in May 2010.

    "In fact, prior to 2010, one would have to go back to the days following the 1987 stock-market crash to see such sharp losses."

    http://www.cnbc.com/id/100352607

    ReplyDelete
    Replies
    1. ya, I'm with you there, its certainly intriguing at this juncture. VIX cash is almost at 13.50 I am looking for, but UVXY is trading futures so can come down much more. Also still plenty of room on the RSI to come down, so leery.

      TZA on the other hand is really compelling here.

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    2. The main point I'm making about the VIX is just that we are in a very unusual market. I think people should therefore be open to thinking outside the box. The seemingly impossble can become reality.

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  25. Hi SS76,
    Did you reload TZA at 12.1$ ?

    ReplyDelete
    Replies
    1. not, reset my buy to $12 and leaving it there. I think it gets there in a final push..

      Really want to buy UVXY though, but promised myself not to buy and hold that one overnight anymore as my new year resolution of tight money management.

      Delete
    2. I'm afraid of UVXY too. I ever lost lots of money on UVXY. I bought TZA at $12.14. Now it seems no chance for me sell it and reload it at $12. Hopefully good luck.

      Delete