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Sunday, June 30, 2013

$SPX - Crash Approaching - Crash Cycle #1

According to Crash Cycle #1, this rally for SPX should continue higher short term into early July. 

Once SPX finishes this current rally, then the Cycle predicts a July crash with few bounces.  The Cycle continues to be negative into the fall months of 2013.

30min Chart











 
 
Crash Cycle #1:




 

99 comments:

  1. That does seem like an overly cash of crash-hysteria.

    Market struggled just to hit 1560 - and that was with world indexes -10/15%.

    Even the low 1530s will be tough by mid-July.
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    1. No, the Cycle suggests rising into mid-July, then crashing from that peak.

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  2. How high will be the rally before the crash?

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    1. I'll be looking to short around 1660 SPX.

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    2. This rally should still last another 2 weeks approximately.

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  3. Ideally SPX should rally and peak July 12th. That should be the start date of the crash.

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    1. Hi SC:

      So should we see some weakness the GLD and SLV as we hit the highs in a couple of weeks?

      Are we just going to see the metals go up, and then skyrocket higher when the general market tanks?

      Your thoughts?

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    2. I doubt much more weakness in the metals. They might trade flat to form a low first though. Then should start to grind up slowly to start with, and then skyrocket. It is a parabolic move in the Cycle.

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  4. SC, thanks for the charts and update, you called the bottom again last Friday. What's the target you see for this 2nd pop?
    Thx!

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    1. 1650 give or take on the 2nd pop.

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  5. SC, im a big fan of your work.

    do you have an outlook for the US Dollar?

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    1. Thank you. Overall I'm bullish on the USD. It is one of the only bull markets left. Not because it looks good fundamentally, but because there are few other markets left that are attractive.

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  6. http://2.bp.blogspot.com/-lLQxQC_axsQ/UdKt_K0ERiI/AAAAAAAAF2k/TOWdkEhGjbc/s1600/SPX%20500(Hourly)20130702033819.png

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    1. Thank you, currently flirting with the red wedge, but I expect according to the Cycle we'll see SPX push up to that higher level.

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    2. RotRot, nice to see you! Remember you from the CIT blog.

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    3. SC, for the record, I'm expecting the miners to test the multi year low for GDX, at 16 for the major bottom. This will also mean Gold drops to 1150 or so. Once that happens, that will be the big big opportunity to get into the miners for the long haul.

      I am with you on UVXY now, as I think its time. As per the roadmap on my site, I have July 5th or 8th as the next peak for the SPX, but of course it could stretch to mid July as you are suggesting. Either way, the VIX usually moves earlier than the SPX so may be prudent to be loaded up by Friday. My suspicion is that a robust jobs number initially lifts the markets, and then it crashes realizing that the chanves of FED easing ending soon is now quite high.

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    4. Thank you SS!

      There is room for VIX to cool yet. 13.50 to 14 VIX looks realistic. SPX consolidating, and another surge up coming imo.

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  7. SC, Thanks for all of the hard work/charts. I have been following you for awhile. I like your style when dealing with the naysayers. None of us are correct 100% of the time. Especially with QE artificially supporting the market.

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    1. You are most welcome! It's an unusual market, that is for sure, and a strange moment in history.

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    2. Hi SC, After the crash low #1 sometime in August you would expect another month or 45 days of lower market and bottoming formation before surge again similar style to 2011? That's what looks like from chart #2, just wanted to see if you have different outlook or sharp rebound thereafter and such. Thanks!

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    3. Yes, very similar to 2011 in many ways. Yes, I expect it to be in tune with the Cycle chart. Sideways chop, and I am anticipating a low in the fall.

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    4. What will UvXY be doing during this sideways chop? Another plunge to $90 or will it be backwardation like TVIX in 2011?

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    5. UVXY should continue to rise during that chop similarily to 2011. For targets $160 at least on the first drop, then grind up to $250 in the fall. I have the charts coming for UVXY.

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    6. SC, we could have a sharp drop to retest at 1560 or a little below to 1550 to make a double bottom and head higher cautiously until a solid hint of FED strengthening in coming months. Since low US inflation numbers and slower global growth coupled with China bottoming, FED's next strong move could very well boost the market as it has been boosting all along. I mean, currently we don't have risk of shocks coming that we had from Europe like in 2011. In the absence of it and in the presence of FED boost, instead of a sharp drop we could very well be looking a charming rally toward fall. Just a thought and a hunch.

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    7. Awesome! Thanks SC! I'll be sure to exit XIV by SPX 1650 or so.

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    8. Payday, XIV right now is ultra dangerous. I would exit and just wait for the SPX to move higher. Personally I don't see as much upside as SC, but have the turn down happening on either the 5th or the 8th as my chart said months ago, so would be very cautious holding any bull positions that can get slaughtered pre-market before you even get a chance.

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    9. SS76, thanks! If I get slaughtered on XIV I'll be rich on UVXY! I only play XIV for these bounces. My last entry was in 18's so i have some room.

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    10. ok, good stuff. Of course, once UVXY takes off, XIV will be money in the bank.

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  8. SC, do you see this as a possible 2nd dip in your cycle with the final pop on deck? Do you still see target as to the 1650 area? Thx

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  9. SC,

    Do you think this low in gold will be taken out in july?

    Down into 1100 area perhaps?

    Thanks.

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    1. I've been thinking maybe it can rise to $1300 and might see a dip to $1210. Then, rocket higher. I am expecting Gold to do very well during the second half of July.

      The low probably will hold imo, but a slight lower low could be possible. In any case I bought it for later in July, and according to the Cycle there is good value at these prices.

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    2. SC, Gold was at 1210 today. Any further thoughts? Looking scary at the moment. Might be just a stop cleansing dip...

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    3. Let's see if Gold holds at this level. A slight lower low could be possible too, but would not change my outlook over the next month.

      Gold is cheap here and safe haven rise is coming soon imo.

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  10. I have made the switch from DUST to UVXY as I have more confidence that UVXY is the one to hold than DUST.

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    1. pffff, what a great move that was eh.

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  11. S&P Futures are up sharply today. This may be that second push up in the Cycle from the green arrow. Let's see how things are looking tomorrow. At this pace I'll be looking to short mid-late next week. I'm just waiting for the market to surge up since the Cycle is still positive, and I'll short.

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    1. Keep in mind some of the Cycle time/price may not show up during regular market hours due to the holiday. In any case once the market surges up I'm going to be shorting aggressively.

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  12. what is your VIX target at the low in August?

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    1. 30's easily maybe even 40.

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    2. For the VIX to get that high, when using your pitchfork method wouldn't the low for the VIX be around 15 here ?

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  13. The low for VIX should be about 13.50 to 14. Still more room for VIX to cool short term.

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  14. Before the market opened today the futures spiked. I believe that was the spike up from the green arrow for SPX. Much of it occurred before the market opened though. The Cycle shows consolidation for a couple of days next and still another push up for SPX which should be the 3rd and final rise next week.

    I'll be looking to short between Wed and Fri next week.

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    1. Sc whats your firsr target for first move down.

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    2. Downside target for SPX you mean?

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    3. I'll be looking to cover shorts around 1390.

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  15. VIX has had support from the 50 and 200dma which is why it has only slowly been coming down. I believe VIX drops below those moving averages so am waiting for that to occur.

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    1. Do you expect brief VIX spike to 14 or 2-3 week bottoming process?

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    2. I think VIX will spend some time down there. 1-2 week bottoming process for VIX.

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  16. SPX is still struggling to breakthrough the 50 day MA... volumes are very low too. There isn't much conviction in this rally... we must be getting very close to a top now. The 10 year treasury is also up very sharply now that the taper looks like its starting earlier rather than later... this might be the catalyst we're looking for?

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  17. Any thoughts on gold and miners here as it is close to its lows?

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    1. I figure GDX is heading to 16 one way or another, and it is there I would be a buyer of NUGT.

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  18. Today figures to be the high according to my work, until early August. Not sure if that is this morning, or at the close. Figures to tie in nicely with SC's 1650 prediction.

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  19. Nice run on XIV...getting ready to exit. May hit 23-24 next couple days. Stop at $22

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  20. DUST looking good for retest of $160

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  21. SC, will UVXY hit $50 or is $56 close enough?

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    1. I think there is a little time to work with but not a lot. Ideally around Wed this week for SPX to reach a high from this Cycle. Price is close to the range I've been targeting for SPX. So I'm getting ready to short.

      Ideally, around $50 for UVXY (give or take), but price is already looking attractive considering the next move in this Cycle.

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    2. $VIX is back above the 50 & 200 DMA. This is significant given today's run up in prices

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  22. EMINI

    http://traderjoed.blogspot.com/

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  23. SC any chance we see SPX hit 1700 on this move with VIX 12's?

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    1. Not in this Cycle. May should be the high.

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  24. XIV looking good here...may see $25 again if VIX breaks 14.50

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  25. Looks like I should have waited on my UVXY purchase. Hopefully this is bottom for now.

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    1. SS76, curious why you see GDX going to 16'... Seems to me its bottoming here in the 23 area

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  26. Well...I stayed away for a reason, I was bullish & thought we might see UVXY down again but new lows!!!!!

    Just goes to show that holding this piece of decaying rubbish is not a wise investment play.

    I'm buying UVXY today...going for a double bottom but with a tight stop.

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  27. What stop would that be Phil?

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  28. SC, nice call on UVXY 50's....now I hope you are right about spike move to 160 next!

    Raised XIV stop to $23...

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    1. Thank you. This $50 to $52 area is a decent support for UVXY. Around $48 is another that could be possible. It doesn't seem there is much downside left.

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  29. I'm working on updated charts today/tomorrow. A lot of evidence...

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  30. UVXY...reviewed charts for multiple time frames (2 hour, daily, weekly)...looks like there is more downside...

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    1. How much downside do you see Rotrot?

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  31. VIX 13.50 for a bottom still looks about right.

    SCJuly 5, 2013 at 7:09 AM
    "The low for VIX should be about 13.50 to 14. Still more room for VIX to cool short term."

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    1. Hmmmmm....would that translate to XIV $25?

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  32. The bigger picture is that VIX has been trending up for 4 months already.

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  33. "The bigger picture is that VIX has been trending up for 4 months already."

    Does not translate into an uptrend in the price for UVXY.

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  34. So far not impressed. Vix may be up trending for 4 months but UVXY makes new 52 wk lows...XIV isnt making any new highs either...they BOTH suck!

    Only DUST has been a good profitable trade but looking toppy...

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  35. The volatility etfs such as UVXY outperform at high levels of VIX. VIX has just started to trend up in recent months.

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    1. UVXY lags the VIX, but it's time is coming.

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    2. "UVXY...time is coming"

      concur...just a matter of timing...

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  36. VIX has a golden cross, and according to my Cycles it is real. VIX bull market is starting.

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    1. Wondering if a crash in bonds may be the catalyst that sets things off?!

      BONDS do not look good here at all...interest rates spiking. I think bonds, & stocks move down toether but it will take spx a few days to get the memo.

      Until then waiting patiently for VIX to make its debut move over 30....that will be the signal UVXY has reversed course.

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    2. PayDay

      you waiting till VIX hit 30 before entering UVXY?


      Thanks!

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    3. No, VIX 30 would be too late. You would miss most of the initial up move.

      I should clarify, I'm waiting for VIX 30 to ADD UVXY ...i always hold small core position for these bounce moves VIX 12-14 to 18-20. Also play XIV which UVXY correlates very nicely. too bad there is no 2x inverse VIX.

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    4. XIV has 3 recent downside gaps to fill....VIX has 3 upside gaps to fill....we all know how much VIX loves to fill those gaps!

      There is small chance of 4 gaps in a row but those are quite rare. Today is low risk XIV short imo.

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  37. There are 2 major perceived fundamental negatives coming for the markets. The first is the QE "tapering" - stimulus is ending. The second which no one is talking about currently is that the US reaches the debt ceiling again this fall. Talk of debt ceilings means talk of debt defaults again. The debt ceiling talks in July 2011 led into the market crash that summer of 20% during 2 weeks. So there is already the precedent of the market crashing around these debt ceilings.

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    1. Doubt there is another debt ceiling fiasco. First in 2011 the tea party was in power in Congress (not now). Second the SPX initially rallied on the rumor the debt ceiling talks were resolved....THEN Egan Jones DOWNGRADED US DEBT which ignited the crash...Obama has sufficiently punished them for that blunder so no more downgrades coming either.

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    2. What is interesting is that the Cycle shows a low coming late this year. Point P. So while I think there will be some anxiety about debt ceiling issues, I don't see it being much of a problem either.

      The market will become concerned and perceive it to be a problem but it will probably be resolved much as the fiscal cliff.

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  38. There are concerns about bonds and the Japanese situation, but I think these are concerns for another year. The markets lurch from one crisis to another...

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  39. Hi SC

    Question regarding your entry now that we reach 1653+ today. Are you still going to wait till 1660 before you enter UVXY? only less than 7 points away, while your have a target of over 200+ points drop?

    Thanks!

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    1. It is getting close to the VIX and SPX levels I've been waiting for. I think tomorrow may be a good spot to short.

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  40. 1946 analog...

    http://tinyurl.com/l58ul83

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    1. Interesting, thank you!

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    2. Thanks Rotrot. I am following the 1969 correlation chart which I've posted here with dates:

      http://1.bp.blogspot.com/-8jgeD0aLkVc/UUZ5HdpzOnI/AAAAAAAAAQ0/JrXOsP7gYRc/s1600/2013+Primary+S&P+Roadmap.JPG

      The drop is imminent.

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  41. I think a catalyst for this collapse will be a combination of the woeful China trade data, FOMC minutes to be released this afternoon, and Mr. Bernanke's speech later today on the achievements of the Fed over the past 100 years. I have a hunch that during the speech, or more likely during the Q&A, something mentioned will be 'interpreted' by the market as highly bearish thereby precipitating the crash... good theory? Futures are down this morning so who knows...

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  42. New Cycle coming for UVXY with July/Aug plan. The Cycle shows how UVXY should behave going forward.

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    1. Hi SC:

      I see you are predicting a drop to start soon.

      Are you still predicting a surge up in gold?

      It seems VERY unlikely in the current environment that we would actually see the markets going down and gold going up. I think the more likely scenario is for EVERYTHING to go down, as it will most likely be predicated on some sort of fed "tapering" talk, and I can't for the life of me figure out how that will help gold/silver.

      Cheers,

      Bicky

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    2. Yes, The Silver Cycle does predict a surge up in Gold and Silver. Basically Gold should rise as as safe haven demand dominates for the near term.

      However, I do agree and the Cycle for Gold and Silver are still negative longer term. So the safe haven bounce for Gold should only be for a month or two.

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  43. New VIX/UVXY analysis posted.

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