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Thursday, August 21, 2014

$VIX - Cycle Update - Timing!

VIX found resistance and has been declining from the recent high as predicted by the VIX Cycle.  The Second Yellow Arrow low is due in September according to the Cycle.

More importantly, the Cycle shows a massive spike up occurring from the Second Yellow Arrow low.  The First White Arrow high is due in December!     


VIX Cycle with direct comparison to VIX Daily:

 

101 comments:

  1. Special thanks to a friend who put this chart together!

    It shows VIX compared to the VIX Cycle model very nicely!! The highs and lows line up quite well and the behaviour is strikingly similar too...

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  2. Ideally about 3 weeks to the next major low for VIX.

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  3. hello SC.
    Its been a while... certainly..we're headed broadly higher into September... but there looks to be prime opportunity for a key turn by mid/late Sept.

    In my view, equity bears should be seeking the sp'1920/00 zone..along with VIX in high teens..if not low 20s.
    -

    Key thresholds - indicative of much lower levels would be sub'1900.. along with VIX 22s - surpassing the 2013 VIX high.
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    Good wishes into the next big turn.
    -

    *ohh, and the fact that the QE fuel will finally stop end October is surely going to help...if only in psychological terms, never mind the actual 'underlying bid' aspect.

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    1. Small dips are possible for SPX, but the Cycle is suggesting SPX should rally for 3 more weeks into a major high in Sept.

      Then SPX is due to start declining down from a Sept high, moderately at first in October, and then accelerating straight down in Nov and Dec. Can see 40 VIX or higher by the end of the year.

      The Cycle indicates SPX continues to head lower next year also. This is a true bear market coming. 25 to 30% lower for SPX from a Sept high.

      Yes agree, the end of QE will likely be one of the main "reasons" people will claim is responsible for the panic.

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    2. Best to you also! A much more aggressive and faster paced market is on the horizon!!

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    3. re: Can see 40 VIX or higher by the end of the year.

      Hell, even 30s would be a major shock to many. We've not seen the 40s since late 2011..and that feels more than just 3 years ago!

      Certainly..given another 3 weeks or so..the VIX calls will be cheaper...and I'll consider picking some up (which would be the first time since July 2013).
      -

      So..lets see where we are in a few more weeks... :)

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  4. your spx cycle high correlates with Alibaba IPO, biggest ever IPO with wall street big houses running the show, thus they will pump it higher as they start the road show on 9/3...IPO 9/16.. good stuff on you vix cycle

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  5. 120 minute TICK and NYAD charts cause me to believe that it is show time! did the recent VIX low mark the 'Second Yellow Arrow"?

    rotrot August 20, 2014 at 12:48 PM
    VIX is close to a rally...

    rotrot August 21, 2014 at 12:50 PM
    interesting that the rally only lasted minutes...regardless, the VIX is moving toward a meaningful change-in-trend...

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  6. VIX consolidating currently, and there might be short term chop. However, expect another leg down for VIX to a double bottom in the 10's.

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    1. SC...have no idea what alleged 'cycle' you are following...however, the 'technicals' are crystal clear...if you expect short term chop directly ahead then you may be in for a surprise...VIX is about to rally and the indices are going to drop...

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  7. VIX

    http://traderjoed.blogspot.com/

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  8. SC, considering the Vix cycle started a spike a couple weeks earlier than you were expecting end of July, can same thing happen again now end of August?

    Also, is your UVXY target still 15? Higher? Lower?

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    Replies
    1. No, VIX consolidating but there should be another leg down coming for VIX soon. I plan to take positions in UVXY when VIX is reaches the low around 10.30 regardless of the price.

      VIX daily needs some divergence to form before it'll be ready to rise. So everything is looking right and shaping up according to the Cycle timing.

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    2. SC, are you planning to double your UVXY position bought at 60.79? If you double your shares here and UVXY rallies to 31 you will break even on that trade and not loose any money.
      -----------------------------------------------------
      SCFebruary 14, 2014 at 10:59 AM

      Bought UVXY at 60.79.

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  9. SC is 11.24 on the VIX close enough

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    Replies
    1. No, I don't think so. Lower yet, and still 3 weeks until our Cycle low is due.

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  10. Silver continues it's decline, and that Cycle has been extremely accurate also. What is most interesting is that the Silver Cycle is pointing to a move dramatically lower into year end. The VIX Cycle is showing a big move into year end also.

    Both Cycles are completely independent of one another and showing the same timing and a large move ahead. That gives confidence that both Cycles will likely continue....

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    Replies
    1. SC, Can i ask why are you not short silver if you are so bearish?

      ---------------------------
      SCJuly 17, 2014 at 8:16 PM

      I'm going short Silver soon, around the end of the July.

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    2. I do think Silver is a great short. The precious metals traders should find that Cycle interesting.

      Having said that I think being long VIX will make larger profits.

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  11. VIX

    http://traderjoed.blogspot.com/

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  12. Just simply waiting for VIX to decline to the 10's. Probably can see that within a week.

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  13. VIX is waffling around currently. A lot of resistance in the 13 to 14 range for VIX.

    I do think it'll come down into the 10's but like I said this could take a week to occur. Which would be just fine since this burns some time, and the Cycle is coming due later this month...

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  14. Hi SC, in your VIX cycle chart, the second yellow arrow is slightly higher than the first yellow arrow. If the first yellow arrow is 10, and now we are around 11-12, why do you insist it must go down to 10? Could it be that the recent low of 11.5 is the final associated with the second yellow arrow?

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    Replies
    1. That is a good question.

      The lows in the VIX have all been lower than indicated in the Cycle. Because the second yellow arrow is slightly higher than the first yellow arrow in the Cycle, a lower low is not likely for VIX. However, given this behavior a low in the 10's, the same as the July VIX low, is what is indicated.

      As well the Cycle low is not due until later this month anyway. So there is time.

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    2. Hi, it seems that William was right. What do think SC? In early September we made a higher low as your Cycle suggested. Why have you decided to override your model? You do not believe that the low made in early September is going to hold? Thanks for any comment.

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    3. The Cycle did suggest the higher low, but in the past VIX has always gone slightly lower. So it made sense to expect that. However, this time it didn't get lower. It worked out exactly as shown in the Cycle.

      VIX has broken out, and I do expect now that the higher low in Sept is going to hold. The next move up from the second yellow arrow is exciting and there is potential for extreme profits.

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  15. As well divergence should form on the daily chart for VIX. This will take weeks to form.

    Also there is the Alibaba IPO coming out. That is being timed for a high market.

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  16. SC, so basically you are expecting a double bottom in 10 for Vix instead of a lower low or higher low?

    I agree a double low is possible but higher low is also possible as is usually seen in significant bottoming processes and change in trend. 11's are a good entry point imho.

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    Replies
    1. Yes, that's correct, I am expecting a double bottom with July in the 10's for VIX.

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  17. Hi SC ... any updates on Gold? Seems like it is being hammered on a daily basis; do you think it is about to re-enter its bear market?

    Thx.

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    1. Yes Gold and Silver have been declining according to the Cycle. The Silver Cycle has proven to be extremely accurate with the turn in July accurate to the day.

      Gold is likely to continue much lower with a steady decline as shown with the Silver Cycle. The next leg down in the bear market for Gold looks to be underway. Gold could see under $1,000 by the end of the year!

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    2. SC, I am following up the same for Gold for under 1000, but could it be possible for the timeframe going into December? Isn't it too steep of a decline? I know you confirm on cycles but how do charts show when compare with prior bear leg down? Just wanna get insight since I would want to be out of any large rallies during this momentous decline? Thx

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    3. The Silver Cycle does not show any significant bounces. I suspect Gold is likely to consolidate in this $1200 to $1250 range for a little while (weeks) next. Then plunge under $1200 suddenly. When that happens it should be steady down with few bounces. Basically once this $1200 shelf is breached, then there's nothing to support it, and the next leg down occurs.

      Under $1000 does seem possible for December. All markets have been quiet lately but this is when the most interesting things always happen. Volatile periods are preceded by quiet periods. The VIX Cycle suggests a volatile period is ahead and that does fit well with the Silver Cycle.

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    4. Thanks a lot mate! It's been great reading your insights specially on commodities and VIX, keep up the good work! Thanks again...

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    5. Thank you! The weakest months will probably be late Oct, Nov, and Dec for Gold. The media will likely quote QE ending as the reason for Gold tumbling.

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  18. Hi SC, how do you see the SPX at the moment? Have we topped out or do you think we get one more push up before the larger correction begins?

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    1. I am expecting one more push up. I think VIX is going to drop hard in the short term very soon.

      The VIX Cycle looks for lower levels and then churning, and doesn't really rise much until the second half of October. So therefore SPX has time to make a push up and then churn for weeks into October to form a high.

      Starting in Oct, and then Nov, and Dec look extremely weak.

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  19. Looks like you are right about gold SC; it keeps getting slammed on an almost daily basis. I think we see $1000 before we see $1300 again.

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  20. Nice pop for SPX today. I think the market will now go quiet again for about a week next with nothing interesting happening.

    Very pleased with the way the Cycle is working, so I'm just sitting back waiting. I'm willing to wait before positioning because the Cycle does not show VIX rising much until later Oct, and then breaking above 17 in Nov. Nov and Dec is when the big action will be according to the Cycle.

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  21. Replies
    1. Yes, it looks possible late this month.

      I think SPX will be quiet for the next week but with a sideway to down bias.

      Then after that VIX may hit the Second Yellow Arrow Cycle low.

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    2. Most likely VIX plunges down into the 10's around the end of this month.

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  22. I said in August that QE will be ending. QE ends in October.

    For years people have said the market rally was due to QE. Now that QE is ending, everyone should be saying that the market will decline due to QE ending.

    The VIX Cycle shows a huge rise for VIX after QE ends in Oct. It's simple...

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    Replies
    1. Keep it simple - simplicity is a beautiful thing!!

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  23. Hey SC

    Base on your comment:
    SCAugust 25, 2014 at 11:23 AM
    No, I don't think so. Lower yet, and still 3 weeks until our Cycle low is due.

    This is the 3rd week, you expecting the low to be in like basically now? or you see them dates move into October?


    Cheers!

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    1. The Cycle is coming due in September. I think there is about a two week window to work with though. So that could take it to about the end of the month.

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  24. Most likely VIX pops to 13 then down into the 10's around the end of the month.

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  25. SC, I don't understand your waiting? According to your cycle we should have a higher low(second yellow arrow) and that is exactly what we got.
    VIX looks ready and pumped to me.

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  26. SCSeptember 17, 2014 at 7:28 AM


    "I think SPX will be quiet for the next week but with a sideway to down bias."

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    1. but do you think the VIX has bottomed - 2nd yellow, or do you still think we will see the 10's shortly?
      thanks

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    2. Market is too weak. Might not make it to the 10's. However, I am expecting another test of the 11's at least next.

      VIX resistance just above at 15.50.

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    3. Good luck with that. I personally feel that any downside risk in either UVXY or TVIX is minimal from here and that they bottomed on Friday. I bot yesterday at the open.
      Happy to ride em for a while longer.

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    4. VIX has a gap below around 12 something, we may hit there next. 11 is pushing it, 10 unlikely.

      SC you planning on trading still? have not seen you post any trades for a long time. are you just fishing?

      Cheers!

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    5. congrats beetlejuice
      looks like I'm missing the party

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  27. VIX reached 15.50 and a little above. There is resistance here.

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  28. It's going to take a massive effort to lift the indexes now, technical damage is huge and no more QE to provide turbo boost....I think they try to get the vix back to 360 sma....if it could stay above the 360 sma on weekly, very dangerous for the mm's/bulls

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    1. Yes damage is done, and QE ending.

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  29. Still prepared to hold TVIX/UVXY overnight, I think the markets have further downside tomorrow and it could be very ugly on Monday depending how tomorrow plays out.
    I will reapraise things tomorrow.

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  30. SC, noticing VIX about to enter golden cross. Is vix 10 still on the table or is 12's lowest for second yellow arrow? Thks!

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    1. Yes, golden cross soon. VIX can pullback here and consolidate, and the Cycle doesn't show much upside for VIX in Oct. Only a moderate rise in Oct, then spike up in Nov and Dec.

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  31. Glad I held my VIX longs. I think the VIX is headed for 40's very quickly then a pullback for several weeks before a huge spike to 90's 1st qtr of '15

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  32. SC,
    Given the situation in HK and October is about to start, is it the perfect time for the market to tank? that means VIX will surge?

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    1. The Cycle shows only a moderate rise for VIX in Oct. The Cycle shows VIX surging the most in Nov and Dec.

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  33. SC, could you please comment on Miners? I am trying track down a bounce coming or in the making? Also, got shorts to cover...Thanks

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    1. I think there will only be a few small $30 to $40 bounces for Gold. Trend should continue down for months into Dec. Still targeting $1,000 by year end.

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  34. Hello SC- It seems that volatility has bottomed since early June. Do you disagree with this view? Thanks for any comment!

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    1. Yes, the VIX has bottomed, no doubt about it.

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  35. VIX stretched in the short term though so likely to cool off and form a higher low. That's when I'll get aggressively positioned.

    Everything looks good. The Cycle is playing out.

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  36. SC I believe the spanner in your works is the inability of 2 of the three indices to hold their respective 50dma's amd the R2K breaking down.
    I think they are now headed for their 200dma's before any sizeable bounce.
    Still holding long VIX.

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  37. I'll be getting more aggressive for sure. There is strong confirmation of the Cycle. Every indication is that this next huge move in the VIX is likely. VIX likely to grind up in Oct, and Nov looks like the biggest month.

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  38. Oct looks like it's going to be choppy but grinding lower for the markets.

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  39. I commend you for sticking to your guns. The big moves are most definitely ahead. 90 VIX is very doable IMO.

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    1. The Cycle white arrows should be around 40 to 50 VIX.

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  40. sc, whats your spx target for the drop?

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    1. First target area for Dec is a test of the trendline from 2009. Around 1650 SPX. Next year can see lower, as low as 1450 SPX.

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  41. SPY buying on weakness....back to back days..big numbers. VIX can't even stay above 17.55 today, typical resistance at 200 weekly avg.....i dont know. i do like the crashy head and shoulders look on RUT, 1082 must hold.

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    1. http://s13.postimg.org/ym46dbwbr/RUT_OH.jpg

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  42. The golden cross is imminent on VIX. That might carry VIX just a little higher next few days, but then then cool off. However, because VIX now has rising support I doubt can see below 14.50 on a dip.

    The market will probably trade flat and choppy for a couple weeks. Little upside or downside short term.

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  43. Look at the DAX. Germany is heading into recession and itis going to drag the rest Europe and the world with it.
    Germany is the leading producer of high end goods, they go, we all go. Nobody else will fill the gap.
    SC your down side targets for the SPX are too high.

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    1. There is a much larger move coming later in my SPX Cycle. These targets are just for the next move only.

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  44. No QE equals a declining market. That is simply the relationship right now.

    After it declines this year and next year, eventually it'll be able to rally without QE. When that occurs, it is the ultimate in complacency. The biggest drop is after that.

    All of this will take years...

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  45. SC, when VIX hits 40-50 at the white arrows what is your corresponding target for UVXY? Is it still $200? Higher? Lower? Tks!

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    1. At the first white arrow VIX 40, UVXY target is 300% to 400% around $70's to $100. At the second white arrow can see 700% to 1,000%. That's $175 to $240! I'll be looking at this in more detail.

      TVIX rose 700% in 2011 on a 2 month, 300 point SPX decline. This move for SPX should be larger, but also take longer. So the percentages can be similar.

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  46. More likely scenario. 2019 to 1880 to 19xx to 1860 to 1950+ end of year. Not really that interesting....pretty normal action.

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  47. The fact Gold, Silver, Oil, Russell have been in serious decline for months, and VIX rising since July, suggests a large decline for markets ahead. These appear to be leading down.

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  48. With QE ending it makes sense to expect a declining market.

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    1. Eventually the market will be able to rally without QE, but that will take time. Too weak right now.

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  49. VIX

    http://traderjoed.blogspot.com/

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  50. According to plan, VIX popped a little on the Golden cross yesterday and then cooled off.

    I'm loading up on UVXY this morning in the $28's. Likely to see around $34 next week I think. I plan to make 3 or 4 trades over the next 2 weeks....expecting a choppy market, great for trading.

    SC October 1, 2014 at 11:46 AM

    "The golden cross is imminent on VIX. That might carry VIX just a little higher next few days, but then cool off. However, because VIX now has rising support I doubt can see below 14.50 on a dip."

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  51. UVXY testing the top of the big gap up from the 29th. VIX has the golden cross, and that should pressure VIX up next week.

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