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Sunday, April 6, 2014

$SPX - Major Trendline to be Tested

SPX is peaking with a decline anticipated for the rest of the year.  The current market is simply quite overextended, and exhausted.

In contrast, VIX bottomed in March of 2013 - a year ago.  VIX has been rising for over a year, and that is a clear warning signal.

A decline for SPX is likely to be choppy with significant bounces on the way down as it corrects to the trendline from 2009.  A 250 point decline is estimated for SPX from the current level, and that represents a 13% decline.

3day Chart


88 comments:

  1. VIX probably settles and touches 13 this week then UP well over 20 soon. Target for VIX of 30ish later this year is reasonable.

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  2. UVXY target still $90 soon or later in year?

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  3. We can see $80's shortly, and $90's later. It's definitely going to be choppy so I'll be trading along the way. We're establishing a nice trading range.

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    Replies
    1. So the plan is still cover around 1810 then reshort on the bounce?

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    2. Yes, downside for weeks to come, will look to cover late this month. Still expecting a low in May.

      I think it'll be 3 legs down. First low in May, bounce, another low in the fall, bounce, and then test the trendline late in the year.

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  4. V bottom. Same as December. New highs in April next S&P.

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  5. The slope of hope has begun. Only small bounces on the way down for SPX.

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  6. New highs in April on earnings. I have no doubt.

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  7. This bounce nearly over. Maybe 10 points to 1675 SPX, that's about it. Very weak.

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  8. This market doesn't go down - it goes up. Please listen. Up..up...up. 1920-50 soon.

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  9. SPX likely to stall during the next couple days and plummet into the end of the month.

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    1. VIX well over 20 short term. VIX ready to run for 2-3 weeks.

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  10. I'm expecting a parabolic move up for VIX short term mid 20's.

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  11. UVXY target around $85 May.

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  12. VIX to see 11.xx in April. Please listen. Please. Huge rally underway now.

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  13. Hey SC

    with VIX well above 20, you targetting UVXY lower than the last high?


    Cheers!

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    Replies
    1. Yes lower high for UVXY but VIX slightly higher high. VIX should hold above 13.10 here.

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  14. April should be 1890-1950 range in S&P. Then wave down to 1780-1800 at best. And that's pretty much your summer. No real drama here. No major downturn, no VIX spikes...this is status quo...."safe" market. No more black swans..or earnings worries...or bullsh-t euro deflation nonsense. Just up...with normal pullbacks. The 2008 woosh down really scared people into thinking the stock market is a devil in waiting..including this blog? HIstorically the market continues up...up....and up despite intra year down waves. The rotation from sector to sector has been phenomenal to keep safe levity. I myself was a believer that we would see a minor collapse..but I have to say now...those dreams are just fantasy....so in summary, ECB has eurozone covered if necessary, US mild to positive earnings in 2014, Fed orderly withdrawal (it worked!), Ukraine to be resolved sooner rather than later, US midterm elections predictable and of no consequence, China/Japan...zig zag in upward direction. People, the global direction is up. Keyword takeaway: UP. Stop going against the grain (if you are). With all due respect, I think this blog is more often incorrect than correct in its calls. I'm open for debate, but my track record is good on here :) The vix did that 12-21 dance for some time, but seeing above 19 again is farfetched if not misleading to suggest. Above 21 is absurd. Years 2000-2007 was a particular period that will not replay again.

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  15. I believe VIX around 22.50 is a good target for the last week or April or first week of May. I plan to hold positions and take profit then.

    Selloff just getting started.

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    1. There is a little resistance for VIX around 18, but not much. Once that clears then parabolic up to 22.50.

      VIX 23 is strong resistance, so expecting it to dip there and run to 25.

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  16. 18 to 19 VIX by Tues/Wed.

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  17. Plenty of room on the downside for S&P here.

    No one seems to be worried about this selloff, and there is no bad news either. Of course the "bad news" will present itself closer to the bottom, as always.

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    1. Therefore, common sense says this selloff is just beginning!

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    2. What level do you see for SPX when VIX around 22.50?

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    3. It is difficult to correlate them directly. VIX typically can shoot up near a low for SPX as panic sets in.

      I'd like to see how it acts around 1800 next, probably lower than that, but in any case I will cover short when VIX reaches 22-23.

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    4. Also I plan to cover shorts around the end of the month. Too early right now.... I do think at VIX 18, the market will manage a small bounce, but I'll wait for late this month.

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  18. There's your little pullback, I jinxed myself by writing on here..ha. Still 1920 S&P to come soon. Nothing to see here, just a normal pullback. Be careful.

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  19. Hi Be Careful,

    First of all, thanx for sharing your views on S&P. Why do you see 1920 soon for the stock market? Where do you expect the bottom? Under which level are you proven wrong? Thank you for your honesty and your courage.

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  20. We're at the typical middle of weekly Bollinger. We rarely close below it on the week...or spend much time below it at all. 1830 about. No worries, up again soon. I don't even think we close below 1830 this week or any week in April for that matter. Just algo/computers shaking the tree.

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  21. Ok, in other words, if S&P continues to decline until the end of April, you are proven wrong?

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  22. I'll be back to admit near term defeat if there are consecutive closes below 1800. But VIX closings over 21? That's not happening!

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    Replies
    1. you had your day...now you are about to get your clock cleaned!

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    2. How can you be so confident that vix won't close above 21? Your previous post stated spx wouldn't close below 1830 this week/month... Just want to understand what you're using for these calls. Below 1800 we'd likely tag the 200sma for a likely bounce

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  23. Awsome reads
    http://americasmarkets.usatoday.com/2014/04/02/is-a-1987-type-market-crash-37-days-away/

    http://www.newsmax.com/Outbrain/billionaires-dump-economist-stocks/2012/08/29/id/450265/

    http://www.zerohedge.com/news/2014-02-17/soros-put-hits-record-billionaires-downside-hedge-rises-154-q4-13-billion

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  24. This bounce nearly over for SPX again. 1800 soon, then a 30 point bounce for a week. 1750 in May.

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    Replies
    1. Would you cover shorts at 1800 or still wait in May?

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    2. Might just wait, lots of downside yet to come.

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  25. Do you have a target for the the peak in SPX? Cheers

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    Replies
    1. The peak will be reached when my VIX Cycle is that the yellow arrows. That won't happen this year as the VIX Cycle is pointing higher for the rest of the year at this pace. Likely peak next year.

      I'll be looking at targets late this year since still quite some time away...

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  26. UVXY is even with SPX up 11 points. Market is doomed....

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  27. This is going to be a very choppy year which will be great for traders. Perfect for using Cycles - my favorite type of market.

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  28. Doomed? Two huge up bounces off 1815.
    We...are....going....up....not down

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  29. I should start my own blog. If you meant choppy in an upward direction, then yes.
    So we got the weekly middle Bollinger puncture on downside..and now back to the 1890 top end. But most likely 1900s S&P next. Vix...mmm....let's say 11-12 to start..nothing too dramatic I reckon. We're in a mild US recovery and strong money flow into US equities. Again, VIX 20s closings are not going to happen, slightly lower highs since February on each brief rally there.

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  30. SC, are you expecting final parabolic top into 1900-2100 area in the SnP500?

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    Replies
    1. Parabolic move but not this year.

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  31. Close over 1840 twice means new highs. So this blog has been incorrect yet again :(
    NYAD to make new highs....skyrocketing today. The power of this rally is even more than I expected. Wow.

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  32. SC, are you going to double your loosing short position here ? It seems the market is overbought.

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    1. I thought the market would bounce for a week from the 1800-1810 level. Came pretty close and we've seen the bounce for a week too.

      Now S&P back at resistance and VIX back at support.

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    2. Is there a line in the sand - thats once crossed, tells you are wrong and you are out?

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  33. What the bears want to see here is the market churn sideways and flatten out next. VIX holding around the April low is important.

    Some indexes already look to have resolved to the downside such as Nasdaq, Russell though.

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    1. Hey SC

      we been churning sideways since beginning of March base on the daily chart on the SPY chart

      Is that the kind of sideways you thinking or even more flat sideways? like 1 to 2 points a day for a few more week and/or month type of movement?

      Sideways movement wont really help VIX product, in your case holding on to UVXY, You still plan to hold it till end of this month?

      Cheers!

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    2. It is true that S&P has been range bound this year. More specifically though I think it can flatten out here for perhaps a week and finish this bounce as the momentum fizzles.

      I do think the VIX is likely to hold around the April low. Therefore yes I'm holding, and expect a run for VIX well into the 20's.

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  34. like i said ill be back around mid apr, just bought my first heavy position on uvxy

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  35. Tomorrow open, all indexes gap up. S&P high 1890s to finish week. VIX will drop below April lows tomorrow...and we'll see if it can defend 12 (not looking good). So likely 11.xx before May 2. UVXY to be destroyed...some more (VIX May month needs to get into 13s).

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  36. im so buying this dip, this is free money..........ukraine issue will be even worse

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    Replies
    1. Yes, perfect bearish setup. Next time S&P plunges it won't bounce much for a while.

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  37. If you mean VIX May futures going down 10% from here...then yes that is a DIP! Complete and utter torture for the UVXY product. If you mean S&P surpassing 1900 quite soon as a Bearish setup..well..I have no comment on that one. These stock blogs are more often wrong than right in their speculation. Permabear Doomster, Channels and Patterns....all making the wrong calls..and then flipping those calls at the wrong time in addition. We are going over 1900. End of story. If AAPL and Facebook don't lead the way..then rotation into others will.

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  38. Well VIX has been making higher lows for 13 months now. S&P has gained basically nothing this year.

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  39. VIX is actually up today lol!

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  40. You're grossly underestimating the money flow into US equities. Today should make my point. 14 point dip bought right up...with a ferocious rally that is going into 1890s and beyond rather quickly. This thing is going so much higher. Please listen. Earnings are actually coming in much better than expected all across the board. Ukraine and China are non events. Japan market is all over the place and seemingly irrelevant at this point. ECB is a cement backstop for Europe. Fed interest rates low. That sums it up. And up up up....we go.

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    Replies
    1. The taper continues - QE is the only reason this market is so high- the air is being deflated from this market.

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  41. VIX up with S&P. It's a clue, and while doesn't mean we're turning quite yet, clearly the market is having trouble holding a gain. It looks heavy again. Let's see how it looks next week.

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  42. other clues are:
    discretionaries down & staples are up
    biotechs were leading all the way up, now they are leading down
    bonds are rising
    financials are tanking and they should be leading
    overall market breadth is terrible
    Nasdaq & RUT usually are leaders & they are tanking - lower highs & lower lows
    Supporting the bullish side though is the NYAD - continuing higher

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  43. sold uvxy, good 3 days profit
    1% dop in spy with 4% gain in uvxy does not confirm panic
    reposition after all time high

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    Replies
    1. congrats
      I considered selling too. I hope I made the right call

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  44. market correction is coming, uvxy weekly short term averages are narrowing and flatting, vix spikes are coming

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  45. hope its not an HS formation on uvxy, which would leads to $15 drop at current low

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  46. Looks like S&P can continue lower into late this week, BUT, remember my forecast has been for a May low.

    Charts coming. Planning to take profits later this week.

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  47. Hey SC

    Are you planning to take profit on your UVXY or SPX short position? So far UVXY has been disappointing everytime SPX drops.


    Cheers!

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    1. Yes, planning to exit both positions. It's been slow and a relatively boring market, but the action will pick up dramatically. The Cycle is at an interesting spot as I'll explain with the charts....

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    2. same plan for VIX around 22 to cover?

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  48. VIX to 11.80 next. We'll see if that is support.

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  49. Vicious move above 1897 should be happening now. NYAD soaring!

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  50. Hey SC
    you plan to exit this week still right?

    Cheers!

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  51. Hey Zane Qu

    you still holding your UVXY?

    Cheers!

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    Replies
    1. yeah, just added another 1000 shares
      dont have a reason not to

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  52. VIX

    http://traderjoed.blogspot.com/

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  53. Leveraged ETF's close after a 50% move, so if the market falls 20% and continues to fall for several days/weeks

    Does somebody know what it means< So, if you are in TZa or VXX, if market falls 30% , you wont be paid

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  54. Anthony Allyn ‏@3Xtraders · May 2
    Leveraged ETF's close after a 50% move, so if the market falls 20% and continues to fall for several days/weeks... you may miss the boat.

    what does that mean, if market falls 30%, uvxy does to say 250, u wont be paid

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  55. Here is a mass email that went out to retail public this morning from barchart.com basically telling retail to short the market. LOL

    Did we get mass emails to short at the top in 2000? 2007? 2011?

    Tells me we are going UP.


    "Fellow Investor,

    It’s over. The broad, non-stop stock market rally is history. Are you ready for what happens next?

    And the volatile first quarter was just a sign of things to come. I guarantee more big name stocks will implode in the months ahead.

    One key warning sign: earnings warnings are hovering near a record high. Of all the companies that have issued an earnings outlook for the 1Q, a whopping 84% of them have issued negative guidance. That’s the second highest number on record!

    Don’t get blindsided! Protect yourself now by clicking here for FREE instant access to my just-released Special Report naming 25 big name stocks to sell now.

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  56. Hey SC and Zane Que, you guys must have some big pockets to play with this beast, still holding?


    Cheers!

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  57. sc, can you post new thoughts/charts. vix products are decaying

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