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Monday, March 18, 2013

$SPX - Slide to Red Trendline Phase Underway

The Cycle estimate for the rally to peak was March 20th (marked by the white line), but it likely already peaked on Friday a little early.  The timing estimate was an approximation that is close enough since the Deja Vu Cycle is large in scale. 

SPX may attempt to rally back somewhat short term, but damage is done, and the slide down to the red trendline phase is most likely already underway.  The slide should be a slope of hope with brief bounces as it declines down to test the red trendline.

A timing estimate for this phase of decline to complete will be coming shortly. 

Daily Chart















The Deja Vu Cycle predicts a decline to Point P as the next major move in the Cycle.  The Cycle shows a choppy slide (slope of hope) with brief bounces as it declines down to Point P.







69 comments:

  1. I do suspect that the mkt tries to rally back to put in a lower high very short term. However, I think it is broken overall.

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  2. I think that Cyprus is going to be non-event for the US markets. In a sense that bad news get ignored in the bull markets, this one will be ignored but we will of course catch up down the road.

    This may be a turning point for one asset class that provides at least some form of long term protection from the government's hands. Guess what it is?

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    1. The Cyprus bailout issue is serious in terms of trust, but obviously the direct economic impact is small.

      Should be interesting for Gold and Silver.

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    2. If you're referring to precious metals, don't forget that the government has previously set prices for, and confiscated, precious metals in times of economic distress.

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  3. I am going to measure the Cycle for timing of decline more accurately, but will just say for now this decline phase may be about 5 weeks.

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  4. SC,
    do you still expect UVXY to hit 9-10, and then drop back to 7-8, and then rise all the way? would it be in line with your forecast on S&P, which will decline to 1420 in May?

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    1. We tested the $9 this morning, now let's see the test of supports around $8, then up to resistance around $10.70. More interesting later this week imo.

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  5. Doesn't look like the mkt is going down....I think we go back up again soon.

    Pure weight of money.

    Sold 30% of my UVXY @ 9.02 for a 40c profit.

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  6. I think UVXY could test the supports around $8, then shoot up to $10.70 or so this week.

    Ultimately I am targeting around $19.50 or better with SPX testing the red trendline.

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  7. The market action should be much more fast paced going forward.

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  8. The big test will come over the next 2-3 days.

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  9. UVXY did cool off, testing support. So now need to give some time here to see how it behaves at support.

    SCMarch 18, 2013 at 6:00 AM

    "For UVXY I actually think it cools off first somewhat very short term. Support is around $8. Then runs up to around $10.50 or so this week. There is resistance there shown on the chart above with the pink and blue lines around $10.50 to $10.70 for UVXY."

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  10. Hi SC<

    Why VIX future jumped over 10% and HVU made only 10%? it should have raised by 20%!

    Thanks

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    1. The March VIX future contract was up nearly 10% today but the April contract was only up 4.76%. The etf was tracking the April contract mostly today.

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    2. When is backwardation going to set in? When we reach the red trendline?

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    3. Payday, we may not get there until late may IMO. Seasonality also supports index going higher into summer.

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    4. I'm not sure when backwardation will initially kick in, but I can say that volatility etfs did not exist the last time we had a bear market. So it's going to be interesting.

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  11. I think there is another drop coming for SPX today or tomorrow. Lower low around 1540 SPX.

    Then will take it from there.

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  12. Hi SC

    Are you planning now to hold your shorts and UVXY till the red trendline hit? instead of day trading them?


    Thanks!

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    Replies
    1. Mostly what I am interested in is that drop down to the red trendline. However, at this point the bears still need to see follow through to the downside.

      I'm going to take it one step at a time, and there are spots that I'll trade also when I can see enough movement.

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  13. Ok Forex Kong has now and just "officially" gone LONG JPY so - this as I understand usually suggests safe haven type money flows and is generally suggestive of "risk off" type behavior.

    Ill need to look again - but thr JPY sure does look as if it's turning upward.

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  14. Decided to sell all my UVXY....up $10,000 so can't complain. Staying out now until the next BIG move.

    Hope you guys get lucky but I can't see the decaying beast going up much from here.

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  15. My humble 2 cents, UVXY is fine until tomorrow likely. It will be XIV time then. Consider this Cyprus fiasco a gift and while it in itself isn't a big part of Europe, how Europe deals with the banking crisis is the precedent that is being set, so I think the ramnifications are huge.

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  16. Hi SS76

    Are you looking at Chart on this one? or just news?

    asking cause SC is showing a dump into May here. Think you have the similar thing. So why here you mention XIV time? is this a day trade you looking at as well?

    Thanks!
    Investbb

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    Replies
    1. My chart is posted here: http://timethetrade.blogspot.ca/p/s-roadmap-till-mid-june.html

      I have up into Mar 31st, then down into May 1 - 3

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  17. when is FED statement today?

    Thanks

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    Replies
    1. I believe it is tomorrow at 2ET.

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  18. Come on RED TRENDLINE!....only $10 left to go till uvxy hits target....wonder what vix equivalent will be? 25?

    If cyprus defaults could see uvxy hit target next week. If deal approved back to $8. If russians step in....hmmmm.thats a wild card. Not sure how russia taking over cyprus banks would be + or - for volatility?

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  19. Right shoulder forming on XIV H &S pattern...break of $20 neckline = move to $16

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  20. Timmmmmbbbbeeerrrrrr on UVXY.......Holy Volatility Batman. Certainly will make for great trading opporunities.

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  21. ECB is going to bailout Cyprus....fire work begins until 2 PM tomorrow!

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  22. Glad I'm out of the decaying beast....mkt looks like it could break 1563 & head for new highs!

    I do think UVXY will be a good buy again however around 1580 on the index.



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  23. We're in a sideways chop for now. I don't think the market has the strength to break out, but it doesn't look ready to break lower yet either.

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  24. I think the big test for the market won't come until next week.

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  25. Just stay well away from UVXY as a buy and hold. Not worth the risk. Up into the end of March, down into May 3rd, and then major move higher as per the roadmap.

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  26. I think that UVXY has support in the mid $7's and could bounce right back to $9.50 again in a few days.

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  27. The action could be relatively slow today tomorrow with SPX peaking today or tomorrow, and plunge again around this Fri.

    The critical week is going to be next week.

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    Replies
    1. Hello SC

      what you mean critical week is going to be next week, are you looking for a test of the pink trend line?


      Ts!

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    2. Today is March 20th which was the timing measurement. However, for now we're just churning sideways. So it is a waiting game.

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    3. SC I think you may be a tad early respectfully as I love your work; I have a Dow T ending March 27 and Spx T ending April 21 we have a Delta MTD high in that window on SPX around April 10 - 14; Dow will lead (attended Marty Armstrongs Global conference.was unbelievably rich with technicals) everything point to April to be the start of the dicy month..correction of consequence by end April.. ultimate low of Delta is July 17 and Marty has August 6 -8 turn point..
      this looks the road map..
      what say you.
      I am waiting out UXVY for more down side here..I dont think we chop I think we head for 1600 on Spx; at least 1570 -90 no doubt..in my mind.
      Nygal

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    4. It is possible that this was just a false start to the downside, and a final push could occur. I'm going to wait and see things unfold into next week and that should confirm. I know we are close to a major turn but it could stretch.

      Thank you very much for the info!

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    5. I still stick to 1580 on SPX and most likely to hit during the first week of April. Any violation above those levels will make be revisit the charts again. Till that time short and manage position.


      indusequitiesMarch 13, 2013 at 11:41 AM
      1580 could be the high for SPX this year. As long as we close below that level, I'll 100% short from this point on wards.

      I'll be surprised the market will move in a narrow range between 1580 and 1460 range for this entire year.

      No one can time the market precisely, but estimated range based trading will give a high hit ratio.

      indusequitiesFebruary 20, 2013 at 6:16 AM
      We are almost there.. Just 1 more dollar down, we will reach 7.60. Not necessary it has to complete the pattern bottom, but one can take position in these range with a stop loss below 7.30 area. Position management accordingly for a stop loss below 7.30. Immediate target 10.80

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  28. Yes, waiting for cyprus....wonder if cyprus is the force that takes us to 1420?

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    1. No Payday it was a turning point for investors in Europe to flee into the US dollar..after coming correction we will see global money flows into usa markets as safehaven..new all time highs once correction is in..explosion to upside potential coming. Buy the correction it will be a 2 year bull leg up into 2015 until Fed ends QE. European and Asian money coming here; looking for entry point and correction will be it.

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    2. No offense to Martin's analysis..but he changes his target based on market condition. Flight to quality will be there, but no indication of coming to US market. Why not precious metals? How was his real estate 30 year bear market call? How was his timing on GOLD to 2000 call? What about his initial call of market crash like 1929?

      I've been monitoring Martin since 2007 and his timings are not accurate like many others. So I do not count on his market call, rather stick to ones own analysis. Just my 2 cents.

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    3. Indusequities..
      my work not based singly upon Martin..Martins conclusions in this market make sense to me..gold lagging terribly, I was gold bull in 70s; right now NO safe haven buying in gold..its in huge indecision pattern very concerning along with other commodities..flight will be first into US dollar since bonds are in bubble asset class of first choice will be equities..by process of elimination..corrections will be bought going forward..two years bull leg coincides with Terry Laundrys M cycle low which has been very reliable indicator comes in every 8 years...due bottom 2016 correlates with Martins top for 2015..Delta SLTD 5 low of consequence due in July 17 coincides with Martins turn point of August 6 - 8..he does not call a low there..I do based on Delta work and T work..my work in gold Ts confirms Martins view point in short term..cycle high due in June and then down again..we appear to be likely in tradin range in gold maybe 1780 - 1800 by June and another correction...if we are lucky..gold may not move but sideways or crawl to upside but not break out of trading range until later in the year or next year..looking at many indicators here..not just Martin but he appears to me to be flat on this time.
      Nygal

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  29. I heard Prechter has his stop at 1571....given he is always wrong, we are bound to go higher & all his followers will lose more money once again.

    1580 - 1610 is my target before a correction to 1500.

    UVXY are telling us the mkt is going higher, SC posted a good chart the other day showing good support around 6.5.

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  30. One other thing, my real time fractal Ts in Dow are rolling over here today into Friday am ...already...might keep dailies sideways into Dow T expiry on Wednesday...has supported the UVXY now to upside at that 8.00 level so think we may have another spike to 10 soon again; in SCs came..before Cyprus crisis works its way through the pipeline ..SPX still working it out and lagging Dow. I am still leery of UVXY as a holding position until later perhaps April..as volatility increases..right here just scalping trades on spikes as I am able..
    Nygal

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  31. Hi SC, what do you think about the last developments on SPX here ? new leg higher b4 some meaningful downside ?

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    1. Let's wait to see how this sideways chop plays out next week.

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  32. I think the cycle is broken....no spx 1420 this year!

    Back into xiv 23 this am

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  33. Liked the bounce from 7.60, but 7.30 is still in the cards. Lets see if we can get 8.95 for position management.


    indusequitiesFebruary 20, 2013 at 6:16 AM
    We are almost there.. Just 1 more dollar down, we will reach 7.60. Not necessary it has to complete the pattern bottom, but one can take position in these range with a stop loss below 7.30 area. Position management accordingly for a stop loss below 7.30. Immediate target 10.80

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    1. Good call on the $7.60.

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    2. Yes, good call...now wheres the 10.80?

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    3. Before 10.80, I'm afraid we might see 7.30 as mentioned in my last week's post. I've taken position @ 7.60 and set orders at 7.40. Both these positions' 50% will be cleared near 8.95 level, letting the remaining to ride for higher price depending on how SPX trades at each support level. One of the most frustrating market since 2009 break away gap from 1040 levels.

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    4. Ok thank you. I have UVXY position at 8.25 and 8.00... My dielema has been do I dump at 7.70's and try to reposition for a few more pennies lower....or just hold thru the chop for a pop over 9?

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  34. UVXY is within striking distance of the 50 dma which is $10.35 today but is sloping down. UVXY may be heading back into the $9's to meet up with the moving average.

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    1. How much more of this sideways chop?

      Markets looked poised to reverse and then the cypriot bank holiday/heist got extended another week...no. Fireworks until the cypriot banks open?

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    2. I can't imagine this sideways lasting much longer. The chop must be nearly over. It does seem we're just burning time.

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  35. I believe this will be proven correct:

    "SS76 March 21, 2013 at 6:49 AM
    1574 SPX by March 28th."

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    Replies
    1. Close -- but no Cigar for you.

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  36. Well, the market is still churning sideways. VIX has a triangle that has formed over the last week and a half. I think a break for VIX above 15.50 would confirm the downtrend for SPX.

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  37. SC,
    Have you read "reminiscences of the stock operator" by any chance?

    Thanks for the blog.

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    Replies
    1. I am familiar with the book, but have not read it. Have you?

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  38. SC, you had mentioned that you were going to post a timing estimate on the June-Nov trendline touch around 1420 (which you referred to as "Point P". Could you let us know your outlook for that? I assume you expect it sometime in April or May? Thanks.

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    1. I have a number of charts and updates coming. We burned up some time with the recent choppy trading, but I believe SPX will peak next week. That choppy period shows up on the Cycle, and the price behaviour of the choppy period matches almost exactly. SPX is following the price behaviour of the Cycle.

      The decline should take approximately 5 weeks. That puts the timing mid - May.

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