Pages

Wednesday, April 24, 2013

$VIX - Short Term Levels

VIX has been trending higher for more than 5 weeks.  This fact continues to be a warning that SPX is in the late stages of a topping process.  Currently VIX is testing the white supports. 

VIX may find support and bounce again soon.  After bouncing it could still test the pink fork line though.  A test of the pink fork would indicate extreme complacency.   

60min Chart















UVXY has been trading in the blue fork.  Interestingly, the turquoise fork accounted for the flash bounce yesterday.

60min Chart

60 comments:

  1. SC, I have a question about your trades section: What does 50% than another 50% mean?

    Does it mean you went 100% of your funds into that position?

    Then you have Short SPX trade, but if you are 100% in UVXY, how do you have any funds left for SPX?

    To avoid confusion you should probably change the numbers to the real % of your trading portfolio.

    Otherwise its useless.

    Just my 2 cents.

    ReplyDelete
    Replies
    1. Good question. I have explained that before but good to clarify.

      100% position in UVXY is a normal, regular size trade position. I've been waiting for an extreme with a superior risk/reward to increase to overweight. So for example 200% would be 2x a normal position. 200-300% is an aggressive, overweight position.

      I show the charts for both S&P and volatility. Some trade volatility, and obviously volatility is a very interesting area with the Cycle models predicting crash.

      Many prefer to trade S&P. I'll always trade and cover S&P analysis as a standard.

      Delete
    2. What %-wise is 1 position size from your total portfolio? 5-10%?

      Delete
    3. I'm willing to commit a sizeable amount and percentage of capital since this is approaching an optimal situation in large Cycles, and now with evidence in market behaviour to back up the Cycles. The risk/reward is becoming very favourable nearing optimal.

      I don't want to influence people though, and want to focus directly on the analysis of markets. I think people should determine what type of position or strategy is appropriate for their own situation.

      Delete
    4. SC:

      All those charts and lines are great, but they have only been useful "After-the-fact" since I have been following you. As soon as they get destroyed, they seem to disappear forever...

      Call the bottom price in UVXY, and stick to it this time.

      Getting annoying seeing you call for the top (bottom in UVXY) over, and over, and over again.

      -Bick

      Delete
    5. I understand, and yes it is a time consuming process. There is a difference between a low when UVXY is setting up to bounce and a bottom. UVXY and VIX look to be setting up to bounce again soon.

      However, I continue to think that the real bottom for UVXY is likely when complacency hits an extreme. The VIX has been trending up for nearly 6 weeks now and that is a clear warning. BUT to really hit an extreme in complacency, VIX should ideally retest near that March level again.

      I am just simply waiting for fears to subside and for complacency to set in to extreme levels again as it was in March for VIX.

      Delete
  2. SC

    The "tone' is stepping up again here...........and you know what that means? Best, joed

    ReplyDelete
    Replies
    1. my vote for comment of the week

      Delete
    2. I know, I stepped up for the team and elevated the tone Joed :}


      Delete
    3. bicky

      The comment was not personal to anyone.......my comment was more geared around magnetic pressure that occurs around turns...........and of course we are at an eclipse and our body is mainly water! Best to all! joed

      Delete
  3. Joe,

    so your saying we're heading down?

    do you have any targets for the down side?

    ReplyDelete
  4. Spx 1482 is where we need to go!

    ReplyDelete
  5. If we break 1611 we are still in a 3rd wave up....we could then see 1700.

    Buying UVXY but my stop is 1620 on the S&P.

    ReplyDelete
    Replies
    1. where have you seen third wave with such indicators?????
      MACD double divergence on the daily chart, market breadth indicators with multiple divergences... I can go on.
      Third wave is a strength and indicators hitting extremes.
      sp500 could go higher but this 100% NOT a third wave.

      Delete
  6. Hi everyone, here is an article on Seeking alpha in which I discuss gold's short term outlook: why this pluge ? Where is the maximum downside ? And contrary to what SC believe, the plunge is not due to deflation. It is absolutely healthy and it wont continue to decline in the long run.

    http://seekingalpha.com/article/1349161-gold-the-color-of-blood

    ReplyDelete
  7. I'll have analysis coming for Gold to further explain my thoughts. It's not that I don't like Gold. The issue for Gold is timing. Gold will have it's time and place. The goldbugs will be right in the long haul, but need to think in terms of decades.

    http://www.bloomberg.com/news/2013-04-24/gold-rout-for-central-banks-buying-most-since-1964-commodities.html


    "Central banks bought the most gold since 1964 last year just before the collapse in prices into a bear market underscored investors’ weakening faith in the world’s traditional store of value."

    "Holdings peaked at 38,347 tons in 1965 and began their most recent contraction about a decade later. Nations from Canada to the U.K. to Belgium sold more than 2,000 tons in the 1990s, contributing to the 28 percent slump in prices and spurring an agreement between 15 central banks in 1999 to set annual sales limits. Disposals under the accord dwindled to less than 6 tons last year, compared with 400 tons when it started, and were eclipsed by the purchases of other central banks.

    The U.K. had the world’s second-biggest reserves in 1958 and now ranks 18th. Gordon Brown, the finance minister at the time, sold about 400 tons in auctions from 1999 to 2002, getting no more than $296.50 and as little as $255.75. The nation raised almost $3.5 billion, which was invested in dollars, euros and yen. The gold is now valued at about $18.4 billion, data compiled by Bloomberg show."



    The central banks were big sellers in 1999. They were selling so much at the bottom they had to agree to sales limits! Now the central banks are buyers....

    Central banks tend to sell near the bottom and they buy near the peaks.

    ReplyDelete
  8. Agree about gold. But for me its a long term investment. I dont care if it falls to $1200, $800 or $400..i will always add more on the dips. Gold will never go to zero....unlike another peculiar stock i own.

    ReplyDelete
    Replies
    1. I have a Gold Cycle analysis coming. It'll show where Gold is now in the Cycle, what to expect in the near term and also the long term picture.

      The dynamics in Gold are quite interesting.

      Delete
  9. 666 uvxy...now that's got to mean something...

    ReplyDelete
  10. UVXY did form a rounded bottom over the last two days with the blue lines as support. It popped and is trading at the pink midfork which is at $6.75 now.

    The rounded bottom was suggested by a Cycle that I'm using for short term movements. SPX likely heading lower into Tues.

    SCApril 23, 2013 at 9:37 AM

    "UVXY should form that rounded bottom over the next day or two, not much lower, then spike up. However, after spiking I think it will cool off again afterwards. So the optimal spot is looking to be early May for UVXY."

    ReplyDelete
  11. How far will this initial spike for UVXY be? Top of blue fork or perhaps orange line 11.40?

    Trying to plan some XIV puts...

    ReplyDelete
    Replies
    1. UVXY charts coming this weekend.

      Delete
  12. Wow, we are almost in May now, and SC still touts his shorts. So far being down 60% is nothing to brag about. SC, you keep talking about timing. How's your timing so far this year? Oh, it'the deja vu cycle, so it can be a little bit longer to play out. Same as the 980 call for 2012. LOL!!!

    ReplyDelete
  13. The Mount Everest Cycle continues to play out beautifully for UVXY. It is simply a matter of perspective, and at this point it is all about the big picture. UVXY has a high of $2,448.

    ReplyDelete
  14. $2,448!!! I'm sorry SC but to predict such numbers in a decaying stock is ludicrous.

    I will eat humble pie if you are right but at this stage I would say getting back to $15 is going to be extremely tough!

    SC are you hoping the S&P is going to 400 like Prechter, who is constantly wrong about everything?

    ReplyDelete
    Replies
    1. No, $2,448 was the high for UVXY in October 2011. It will never see that price again - mathematically impossible.

      However, UVXY and VIX are approaching a major turning point in large cycles. There is overwhelming evidence.

      Delete
    2. OK sorry for my misunderstanding...

      Delete
  15. I just want to point something else out here...this mkt is a ponzi scheme, free market economics is a thing of the past.

    Given this fact, this mkt could easily go to 1650-1700 if we surpass 1611 on the next move. If we fail here, its 1480.

    Either way there is a possibility of a 100 point movement coming soon...from a trading prospective, I think its best for the mkt to PROVE itself before taking a view.

    Too easy to lose one's shirt...no point in just hoping for one's bias view to be correct.

    ReplyDelete
    Replies
    1. We do need to give it some time to let it play out.

      Delete
  16. Just in case anyone still believes in the 'tooth fairy' or free market economics...

    http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425

    Perhaps the 'tooth fairy' is more believable at least..LOL.

    ReplyDelete
  17. Sc, Mt. everest cycle failing UVXY miserably imho...not sure why you think there is a beautiful set up unless you see something no none else is seeing.

    XIV on the otherhand...great set up for impulse move to 24-25...another 10% (probably once SPX breaks above 1597)

    ReplyDelete
    Replies
    1. There is only one bar left to go now on the Mount Everest Cycle to reach the blue arrow.

      UVXY has followed the Cycle precisely.

      Delete
    2. I'll do an update on the Cycle. Very pleased with it.

      Delete
  18. Boy, SC is very please with his charting and his returns. He is still ecstatic on his 980 call for 2012. He must have unlimited funds. LOL!!! If you need a good laugh, bookmark this blog.

    ReplyDelete
    Replies
    1. Bears did quite well at that time in 2012 when SPX plunged 11% right after that analysis was posted.

      Delete
    2. 156 point drop on that negative Cycle in 2012.

      Delete
    3. Like I mentioned, you were bearish from November 2011 from 1080 all the way to the high of 1422. So it finally dropped to 1266 and you killed it? LOL!!!

      That's like saying you own uvxy from 14.50 to 6, then it finally spike up to 9, and you were right?

      Give it up SC. Your readers are not that stupid. Like I mentioned, best blog for a good laugh!

      Delete
    4. I'll sell UVXY north of $100.

      Delete
  19. I am positioning for a major turning point in the market. VIX has been trending higher for 6 weeks.

    ReplyDelete
  20. Large Cycle turns are rare. They take plenty of patience and are extremely profitable to trade. The last negative turns of magnitude were 2007, 2000, and 1987.

    ReplyDelete
  21. Hello SC

    wondering how are you positioning for a major turning point? have not seen you trade since UVXY around 14+ early this year. Or other vehicle for trade either on your trading log.

    Like should you not be building the positions by trading to earn a profit and buy more positions instead of waiting in order to call it a positioning for a major turning point not just do nothing and wait after initial entry?

    Confused


    Thanks!

    ReplyDelete
    Replies
    1. I am simply waiting to build shorts. The market is approaching a major turning point in the Cycles I use.

      The Mount Everest Cycle has one bar left to mature. I want to take short positions once the Cycle is ready.

      Delete
  22. This guy has documented and profitable track record. He is calling for continuation of the break out and monster rally:

    Conservative SnP500 2206 Target 3565

    http://www.thestreet.com/story/11872726/1/stocks-set-to-skyrocket-master-prognosticator-says.html

    Very interesting situation, we have many calling for major top and sell off and then others ignoring doomsters and pushing for higher targets.

    Who wins?

    ReplyDelete
    Replies
    1. His target for AAPL is 1600 by end of 2014.

      How about 'em apples?

      Delete
    2. That is ridiculous. There isn't even any timing on those targets. Definitely wrong. Wavers are always dreaming up nonsense like this based on extrapolation of a wave count with no basis in reality.

      Delete
    3. Don't worry, we have SC's track record on our side. He called 980 for the S&P since beginning of 2012. Lol!!!

      Delete
    4. Simple REAL evidence is clearly showing the bears winning:

      VIX has been rising for 6 weeks. Key stocks such as Apple, IBM, GE are all extremely weak. Financials have performed terribly since 2007, etc... SPX has gained nothing in 13 years!

      A last gasp is possible, not a breakout that is sustainable.

      Delete
  23. $100 UVXY!? Whoa! That seems ambitious even for me...1800% return seems a little unreal... Of course if backwardation sets in a big way then all bets are off...

    I'm just waiting for some ban of short trading when TSHTF or maybe they just suspend VIX trading...all manner of shennangans by these banksters.

    ReplyDelete
    Replies
    1. Cycles are approaching a major turn for a big move in markets. TVIX jumped 700% during 2011, and that was just a 300 point SPX correction - not even a bear market.

      People will be shocked by how much this moves during a bear.

      Delete
  24. What does "one bar left to go before blue arrow" mean? Another drop to hi 5's for UVXY... If that happens then my 24-25$ XIV is done deal...

    ReplyDelete
    Replies
    1. I'll show the updated Cycle comparison, and can explain what I am talking about.

      Delete
  25. "TVIX jumped 700% during 2011"

    I did not recall you owning. But I do recalling you looking for 1040 in Nov 2011 and 980 early 2012. How's that for a track record?

    ReplyDelete
  26. SPX plunged 11% in Nov 2011 and in April/May 2012. Both negative Cycles were very profitable for the bears.

    ReplyDelete
  27. "That is ridiculous. There isn't even any timing on those targets. Definitely wrong. Wavers are always dreaming up nonsense like this based on extrapolation of a wave count with no basis in reality. "

    This is the type of reaction i like to see. Time will tell, the targets seem insane i agree. But hey look at this market - last 3 years is anything but normal.

    ReplyDelete
    Replies
    1. It's the reaction I like to see too. You know the bears are about to take control when people start talking this way. Actually the bears have been in control for a 13 year period, and there is no reason to think any differently.

      There is little time left.

      Delete
  28. Hi SC

    """"""""""""""""
    SCApril 26, 2013 at 1:19 PM
    UVXY charts coming this weekend.
    """"""""""""""""

    wondering if something got delay, still looking forward to your UVXY chart analysis.


    Thanks!

    ReplyDelete
  29. The guy who is predicting the S&P to 2,200 is wavegenius....I have been following him for 3 yrs.

    He is 80% CORRECT on all his trades....until someone can match his record or beat it, I would just keep quiet & continue to lose money.

    Having targets is irrelevant, wavegenius just trades what he sees...this is how to trade in corrupted mkts.

    Getting bearish is a waste of time...wait for the mkt to dictate its direction & follow wavegenius if you want to make money.

    I trade uvxy for 24hr only & continue to make money albeit small.

    ReplyDelete