VIX bottomed mid-March and has been making higher lows since that time. In the Cycle, the red arrow low is anticipated to be another higher low for VIX. VIX has been flirting with longer term trend lines of resistance going back to 2008.
From this red arrow low, a steady rise for VIX into the end of year is shown by the Cycle. The next high for VIX is due after a several months rise.
60min Chart
Before:
Analysis posted October 13th.
"VIX is likely approaching the red arrow low in the Cycle. The red arrow low should form late this month possibly in the 13's."
60 min Chart
VIX Cycle 1:
Good Job , Sc. Now , you see new highs for SP500 this is the top ?
ReplyDeleteTarget price for UVXY for end of the year ?
Have been very busy, and just simply waiting for this red arrow low to mature. As I said in Oct, my feeling was that the pink line would keep the lid on the VIX for a while acting as resistance.
ReplyDeleteSure enough, that is exactly what has occurred. This red arrow low is mature imo, and I will be going short S&P and taking positions in UVXY very soon. In the Cycle, a sizable move up for VIX occurs from this red arrow low!
I believe SPX is near an important top right now. This is the pink arrow high in my SPX Cycle. Major top.
ReplyDeleteI do see VIX and UVXY rising for several months next from this VIX Cycle red arrow low. Will look at targets for UVXY, but VIX 40 on the next high looks possible from the Cycle. Dip from 40 and much higher.
Huge move up for VIX next year in the Cycle.
last week lot of fake prints on vix , fake print on vxx=75
ReplyDelete"The Dude" has returned.
ReplyDeleteLol, I never left. VIX has been churning, for a few weeks. Excellent setup for the bears.
ReplyDeleteThe "ANTIDUDE" indians were getting little restless! lol
Deleteroar!
DeleteVIX 11 is next. 1780s S&P shortly. Here we go..
DeleteVIX 10.xx within 8 weeks
Nice to have you back SC!
ReplyDeleteSpx:vix ratio now at record high (even higher than 2007 peak!)
Due for reversal/bounce soon.
Do you see Vix 20's by end of year or not until next year?
Yes 30's to 40 looks like the next target high in the Cycle. VIX should rise steady according to the Cycle for several months into year end.
DeleteLike Izzz said I izzz short!
ReplyDeleteRed arrow low hit at 12.37 2 weeks ago or are you waiting for another lower low for red arrow on Vix? 12.67 hit yesterday.
ReplyDeleteNikkei Futures getting hammered along with USD/JPY. They are starting to lose the carry trade.
ReplyDeleteI see it consistently mentioned about the decay issue in regard to UVXY/TVIX.
ReplyDeletewhilst decay has been an issue does not mean that it will continue to be an issue going forward.
As an example look at VIX short ETF's such as XIV. No decay issue there, nothing but a long trending rise in fact.
I suggest that if this market transforms into a long term bear market then UVXY et'al will see the decay issue, whilst not completely subside, at least become less of an issue due to the overall trend.
http://stockcharts.com/h-sc/ui?s=XIV&p=W&b=5&g=0&id=p62046188665
DeleteHey let talk about the situation, instead of bashing SC or one up someone else.
ReplyDeleteAccording to SC VIX will head upward of 30-40...dont really know the date or time. which means it can take forever...in the meantime UVXY is going lower and lower due to time (shown with fact over the few years). So what is the point of SC or anyone holding onto this product.
Best to day trade it instead. If want to short market, why not use other product that works better with the hold and sell strategy like product that doesnt lose a ton of value over time as much as UVXY.
Thanks!
InvestBB, which do you recommend for trading volatility? XIV has worked for me but it too suffers from a decay problem and barely eeks out new highs after each correction.
ReplyDeleteI notice same problem with FAS/FAZ, TZA/TNA, NUGT/DUST etc.
PayDay
Delete"decay problem and barely eeks out new highs after each correction"
A 500% return on your investment in 2 years?
I wish I had that decay issue!
Most of XIV gains were in 2012. It made a high at 25, 27, 29 and now 30 ...so basically sideways for most of 2013. XIV is in a holding pattern...
DeletePD, I'm not sure where you are getting your prices from but XIV hardly exceeded $20 in 2012 which is basically where it ended the year.
DeleteIt only broke above $20 in January this year and is now nearing $31 for a greater than 50% gain in 10 months.
Sure the gains are not what they were throughout 11/12 but nothing to be sneezed at.
http://stockcharts.com/h-sc/ui?s=XIV&p=W&b=5&g=0&id=p18389201939
DeleteSC, I have to be honest. I have tried to keep an open mind on your cycle but quite frankly it just doesn't appear to be unfolding as you suggest.
ReplyDeleteHere we are yet again with the market indices turning higher and negating any negative divergence that was in the daily charts. That is bullish again and points to higher indices.
DOW transports look particularly strong at present and for all the talk of cycle tops in just about any time frame you want to mention, the market marches ever higher.
Sure it will top out eventually, but this could literally go on for months. I remember only too well the tech bubble.
You are right it is lasting too long already... this should be the last green week or the cycle (18 Month Hurst cycle) will make a low just moving sideways with best case pullback for SP500 around 1700.
DeleteDow transports visually the cycles - it repeats perfect only the correction is missing:)
http://3.bp.blogspot.com/-B2NQwHqJlF4/UoEiOsChoOI/AAAAAAAADSI/t49K-oD84KI/s1600/w151-8.png
SC, are you in yet, or still waiting?
ReplyDeleteThanks...
We don't know how high the stock market will go. It could go on for months or even years and perhaps even beyond the imagination of the most bullish analyst. What we do know is that the higher it goes, the harder it will crash once the music stops and quantitative easing/rapid interest rate/default takes place. The question is if one can still stay solvent until then. In 2000, stocks considered great buys at $15 and fair value at $20 went to $50. People shorted thinking it is overvalued and lost their shirts at $100 from margin calls. The stock at its highest point reached near $300 before the crash.
ReplyDeleteThe cycle probably works under normal conditions. In the current time period however it is not likely to take place. The question one should ask themselves is that the fed might be looking at your exact cycle. The question they ask themselves is how can I prevent this from happening (increase in volatility or fear). This might be a change from the definition of volatility which reduces the average volatility by 1 point to artificially suppressing volatility
Vix red arrow low broken.. Should have hit last week... Or week prior...
ReplyDeleteHowever with Vix in 12's now a good time to exit XIV positions (reenter on next vix spike to 18 = xiv 24's
I said 8 days ago:
ReplyDeleteBe CarefulNovember 6, 2013 at 12:20 PM
VIX 11 is next. 1780s S&P shortly. Here we go..
VIX 10.xx within 8 weeks
This blog has deteriorated badly,SC is not charging for his chart and opinion so why are you guys so nasty. If you don't believe in his analysis any more then why not just simply go somewhere else instead on insulting him. You don't insult someone who tries his best to help you even when he is wrong.
ReplyDeleteI agree here, people instead of bashing try to add value here...what's use of basing?
ReplyDeleteXIV short term top.
ReplyDeleteVIX short term bounce to 13.50-14
UVXY good entry 20... Or if impatient for 98cents then enter now. Exit 23-24
Hi SC, the S&P keeps going up and up. Any insight,,, as it seems there currenlty isn;t anything stopping the BULLS. Your comments and recent actions are appreciated, Thanks ,,,
ReplyDeleteSC, I have to honest here. Whilst I never condoned the comments of some of the parasites here. I don't think it is fair either that you have abandoned posting.
ReplyDeleteWhilst you may be busy, it doesn't take more than a few minutes to provide an update.
Hey BJ, what you think SC can update us with?
DeleteThanks!
I actually don't see an issue with SC's fractal. Where I think the problem is, is in extrapolating the fractal into current time frame.
DeleteWe are comparing two completely different time frames. I would be interested to hear SC's thoughts on where he thinks we now lay.
uvxy, just crashed
ReplyDeleteyeah it crashed and SPX only up a few points. Imagine the santa rally coming :)
DeleteNew blog
ReplyDeletehttp://swingtradesequitymarketmodel.wordpress.com/
Weekend update. God bless to all.
ReplyDeletehttp://swingtradesequitymarketmodel.wordpress.com/
It's a private, PW protected blog, you idiot.
DeleteActually its not private. Is there any need to be so rude.
DeleteSPX:VIX ratio now at extremes @ 147
ReplyDeleteJust for reference it was at 90 at 2000 peak and 138 at 2007 peak.
At market bottoms the ratio is closer to 25... So long way south from these nosebleed levels.
The low for VIX has held from mid-November. The Cycle suggested the low early November. Close enough. The Cycle suggests a rise for VIX for months next.
ReplyDeleteIn fact, VIX continues to make higher lows from the middle of March!
ReplyDeleteHy Sc , where is the TOP ? WE ARE IN 1800 area ... and UVXY in 18 area.... My god... it's a complete disaster...
ReplyDeleteVIX already bottomed mid-Nov according to this Cycle. SPX often tops after VIX bottoms so it is likely topping now.
ReplyDeleteVIX is flirting with a breakout above the white trendline, and also flirting with a golden cross on the moving averages.
ReplyDeleteThe Cycle shows VIX trending higher for months to the 30's 40's.
Hey SC
ReplyDeleteYou added your UVXY yet?
Thanks!
Not yet, soon though. Pleased that the VIX Cycle continues to work very well for timing. Saw the low for VIX mid-Nov.
ReplyDeleteVIX might spend some time in the support 13-16 resistance range prior to breaking out higher. That is why I've been waiting.
My VIX model called for a low early Nov and the low came in mid-Nov. Quite accurate.
ReplyDeleteThe bigger picture is that VIX bottomed in March and has been gradually trending up ever since.
As shown in the Cycle, VIX rises from the red arrow. Counting the candles and comparing, it should take about 3 months to reach 30's 40's range for VIX.
It is a significant correction for S&P.
I have found it best to look at each phase one at a time - each positive and negative Cycle.
ReplyDeleteSignificant correction for S&P starting, then the P crash next year.
Another strong rally after the P crash, and consolidation for years. The Z crash is not due for years at the current pace.
I'll show some big picture charts.
Took a small profit on my S&P shorts in Sept, was bullish to Nov, now looking to short again. In a week or so I'm planning to short.
ReplyDeleteAccording to the model the S&P should decline trending down for approximately 3 months and then crash after that. So it does need to decline moderately for about months first then decline much faster.
According to the model it will decline next first, then yes, there will be a boom phase afterwards.
ReplyDeleteThe next move in the VIX Cycle is a 3 month decline. The market then experiences a brief rally and declines much further. The negative Cycle should last a year at least.
ReplyDeleteOnce that negative Cycle finishes then, yes, it should boom and stabilize for several years.
Technically this is a breakout for VIX. However, not likely to see much action this month imo. Support 13.50 to 14 and 17 resistance. Probably rattle around in this range for this month, and then move more aggressively higher Jan and Feb.
ReplyDeleteSc - at one point you suggested we would see a fall in the S&P to around 1350
ReplyDeleteand that the larger drop would occur months later - Is this still in the cards?
Low 1400's is a realistic target.
DeleteSC, your take on the precious metals here: is the major bull market in metals over for the foreseeable future? (gold/silver)
ReplyDeleteWhere do metals go from here according to your work?
We saw the spike up off the turquoise arrow low in the Silver Cycle. Since then Silver has been consolidating as expected according to the Cycle.
ReplyDeleteThis consolidation period is nearly complete and the Cycle shows the next leg down for the metals starting early next year. There may be some short term upside but the Cycle does predict that the metals bear market will continue next year.
My VIX Cycle nailed the low in November almost perfectly. Excellent!
ReplyDeleteok, Nice Job but now spx MUST DECLINE TO 1400 AREA .... ( first leg Bear market )...
ReplyDeletenew Highs ahead.... Where is THE TOP ? Please.... Uvxy 18...
ReplyDeleteUVXY freefall. Broken like TVIX. Danger. No recovery on horizon.
ReplyDeleteHi SC,
ReplyDeleteWe are on edge of big Santa rally, what do you think VIX will behave...are you expecting all time low now? yesterday VIX lost almost $ 2 which was huge chunk out of gain...VIX takes weeks to gain $ 2 and within hrs it give up all gains...this is very bad for bears...thanks
VIX is certainly bouncing around on a daily basis, but the March low is holding, and it is above the November low!
DeleteThis suggests a toppy market. I believe SPX will top soon late Dec or early Jan and drop for 3 months based on these Cycles.
Sure enough VIX dipped from the 17 resistance and now back at support.
ReplyDeleteSC December 12, 2013 at 7:19 AM
"Technically this is a breakout for VIX. However, not likely to see much action this month imo. Support 13.50 to 14 and 17 resistance. Probably rattle around in this range for this month, and then move more aggressively higher Jan and Feb."
VIX bottomed in March and still well above the November low!
ReplyDelete1824.....SPX
ReplyDelete16285 DJ
4100 NQ
17,90 Uvxy....
SC, looking at VIX chart it can make lower low...can easily go into 11 to 12 without even a blink!
ReplyDeleteVIX did not bottom in March. Watch closely now as it moves lower.
ReplyDeleteVIX may flirt with the March low, but in any case with S&P higher than March VIX still has held firm since March. That signals a major decline ahead for S&P.
ReplyDeleteSC
ReplyDeleteCan you update us where you think we are now with the crash starting point on the Vix chart?
Currently in this VIX Cycle we are 10 candles to the right of the red arrow. 3 big green candles next in the Cycle.
DeleteTherefore, expecting VIX to break out into the 20's soon.
Do you think the candles on your Vix chart correspond to weekly or monthly bars? The crash has taken longer to come than you have anticipated.
DeleteIs it possible that this chart is measured out in years?
Each bar is taking about a week, therefore the crash due in roughly 4 months.
DeleteI thought it would occur this year but simply ran out of time. Market has been slow, and a grinding rally which burned a lot of time.
VIX in December has formed a megaphone pattern. Looks to be coiling up for the breakout.
ReplyDeleteSC, you wrote here several times over last 2 years that your cycle was showing major crash in the SnP500 just around the corner. It never materialized.
ReplyDelete2 Questions:
1. Why do you still have confidence in this model? Model which predicted the opposite and completely missed once in a life time 500point rally in the SnP500 in short period of time.
2. Why is it going to be different this time? Is it?
Thanks.
The model did predict a sharp rally phase starting Nov 2013. The model was bullish through the fiscal cliff last year, and this year through the government shutdown.
ReplyDeleteThe rally did extent and was sharper than expected but the rally phase was accounted for in the Cycle model. The model caught some of the rally.
There have been plenty of false starts for bears. However, yes the model does predict larger declines ahead. The VIX agrees and is still higher than March with S&P.
This comment has been removed by the author.
ReplyDeleteHi SC,
ReplyDeleteCan you please run your method based on current charts? may be something have changed...looks like S & P correction is over and looking set for new high...just my understanding based on charts..
Thank you
Sc, are 3 green UP candles still next on Vix and what level do they correspond to?
ReplyDeleteYes, the choppy period suggested by the Cycle looks to be nearly complete. That means the 3 green candles are next, and soon.
DeleteI'm expecting VIX to trade up into the 22 to 28 range shortly.
Perhaps a chart that wasn't made on November 6th would be helpful......................................
Delete"shortly" in your terms could be 3+ years.
Hey SC
ReplyDeleteHope you are doing well, not heard from you for awhile, come visit my blog when you free: http://investmentgossip.blogspot.ca/.
For sure love your technical point of view.
Cheers!
The orange arrow was hit in late August. The red arrow was reached in the Cycle mid-November.
ReplyDeleteI've left this chart up since November to prove a point. The point is that the VIX did, in fact, see a relatively tight range since the red arrow in November. The tight range was predicted by the Cycle.
Next things will be much more interesting according to the Cycle. I'm looking forward to posting updates as the Cycle continues...
Bought UVXY at $15.57.
ReplyDeleteBobo MikJanuary 17, 2014 at 4:02 AM
Delete"SC, can you disclose your global PnL for 2013?
Can you also clarify your position on UVXY? What does represent your position in your Capital? Are you going to increase your position?
It would be very helpful to analyze your trading"
I only posted a few public trades for 2013. Made modest profits.
DeleteUVXY is intriguing because the big picture Cycles are suggesting a rare move ahead which is surprisingly large.
Normally I have a regular sized trading position which is just used for short term trading (days/weeks). However there are times such as 2011 when UVXY (TVIX in the case of 2011) can be held for longer periods, and I will then build up a position and continue to add to the position for holding.
I believe we are approaching such a time.
Shorted SPX at 1844.
ReplyDeleteWill plan to exit these positions at the next Cycle high for VIX.
ReplyDeleteSC - several people are predicting an imminent 10% correction maybe at the end of January and a 40% correction in the second or third quarter- does this fit your scenario?
DeleteHey SC
DeleteExcellent, you taking the shorted side. looking real good.
My wheel still showing neutral, so not in a hurry to getting in yet. Especially for VIX product, since those normally pop later on.
good luck :)
Cheers!
A decent dip is imminent for S&P in this model. Several months decline is likely imminent. A sharp but short lived rally should then follow, and then a large fast decline this year.
DeleteCharts are coming to explain.
Well, SC, you get a prize just for lasting this long. So many posters/traders have walked away this past year.
Delete-
I still think you're early on the VIX trade, by as much as 3-4 months.
I've no idea if you ever read anything I post, but suffice to say, I'm looking for a major drop..once we are past April/May.
Thing is, and I've come to realise few will keep it in mind...whatever top we get this spring..it won't be the multi-year top that many are seeking.
Most of the remaining bears who do profit this summer/autumn, will lose it all on the rebound/rally into 2015.
regardless...good wishes in the months ahead.
These recent trades are just for the next month or so. The Cycle shows a decent decline likely for S&P over the next month. I agree with you though, this Cycle will be ready for a major decline in markets after 4 months. So only as a moderate decline over the next month.
DeleteI also agree and these Cycles show that the market will likely see a major decline later this year, but yes it will recover again afterwards.
Permabear Doomster has turned into Permabull Doomster.
DeletePermabear, whether correction starts in April like you think or gears up in Feb first like SC thinks its all just a matter of weeks.
ReplyDeleteThe last "major" correction was Aug-oct 2011 where Spx dropped a mere 300 pts. In that time, Vix only surged from 15-45 but TVIX went from $15 to 110!
Even a shallow 300 pt correction to 1550 should have similar consequences
UVXY can rise 500% on a correction during the Cycle P move. Ultimately though during the Cycle Z move, which is much larger, UVXY should move multiples of that smaller initial rise.
DeleteThese are rare moves.
SC, new VIX chart would be helpful.
ReplyDeleteAlso do you see gold/silver dropping with Spx?
Will have updates on the Cycles coming. For now posted a VIX chart, which is straightforward.
DeleteYes, I expect the metals to drop hard. Probably a few months away according to the Silver Cycle. I can update that Cycle also.
Bobo Mik see comments above. Thank you.
ReplyDelete