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Saturday, August 2, 2014

$VIX - Nearing Cycle Spike High

VIX is testing the red line currently.  VIX may overshoot the red line by a few points, but is nearing a Cycle high. 

In the Cycle, the level of the blue arrow highs was powerful resistance.  Therefore, around 20, is likely to be strong resistance for VIX. 

Most importantly, the Second Yellow Arrow low is due later this year.

Daily Chart
 
VIX Cycle 1:

 

53 comments:

  1. SC, June 8th:

    "Next, the Cycle shows VIX advancing up to test approximately 16's near the red line again. In accordance with the Cycle, it will likely be a violent spike up for VIX. Timing is anticipated to be due late July."

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  2. I'm going to buy XIV if VIX trades into the 19 to 20 range.

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  3. Most importantly I want to buy UVXY near the second yellow arrow low later this year.

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  4. First chart shows a series of lower lows and lower highs, second chart shows a series of higher lows and higher highs. Obviously two completely different trends. Your first yellow target should have been higher low. Instead it is lower low. These patterns are not the same and chances are will not work out the same way, based on the actual price action evidence so far.

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  5. SC, why is your second yellow arrow (circle) down in the 10's when in the cycle it looks like a higher low (11-12's?)

    Also, is vix supposed to hover around the red line resistance for a few weeks and then drop or ....?

    I am a buyer of XIV $33 or less. This puts UVXY into the 40's.

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    1. The levels for the VIX have tended to be slightly lower as compared to the Cycle. Therefore, a double bottom for VIX at the second yellow arrow seems to best fit the historical pattern. Having said that I might start positioning in UVXY when VIX is around 11, and continue to add from there.

      This red line has been resistance for VIX in the past. Likely to see some bouncing around this level. I suspect VIX might overshoot and reach as high as 20, but doubt higher than that on this move.

      So, yes, VIX can take some time here to complete this move.

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  6. The red line VIX resistance proved to be quite solid.

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  7. I'd be a buyer of UVXY in the $25's.

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  8. UVXY...the final (good) opportunity may be on the horizon...if so, one should be reasonable about entry price expectations...waiting for the second yellow arrow to appear later this year could prove to be a mistake...

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  9. Hi SC,

    You said; "July 8, 2014 at 12:25 PM
    No I'm expecting VIX to start rising from a low late July to first week of Aug. VIX to reach the 16 plus level Aug to early Sept timeframe.

    UVXY probably heads lower later this month, but it can rise 100% from that low. Low $40 remains a good target.

    10's or 9's for VIX at the second yellow arrow low."

    Where we are now? It seems the market caught you up by surprise? Do you expect a continuation in the decline or a stock market making new highs FROM now?

    Best,

    Thank you very much for your work!

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  10. VIX started rising mid-July whereas I thought it would start rising late July. So it did start a little earlier than anticipated, but obviously the Cycle has continued to be accurate with VIX now at the red line. VIX has reached the minimum red line target predicted by the Cycle.

    An overshoot of the red line is possible. Short term downside for SPX is possible, but the Cycle suggests we are nearing a low for the market.

    Each red bar has taken about a month in the Cycle. Therefore, I am expecting a 2-month market rally to kick off soon - once this bottoming process completes.

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  11. Thank you SC for clarifying your views. When you say "short term downside for SPX is possible"; what do you mean by that in quantitative terms?

    Thank you

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    Replies
    1. We've already met our minimum upside target for VIX. I think SPX likely to hit a low next week. 1880's maybe..

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  12. VIX

    http://traderjoed.blogspot.com/

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  13. Is today was the bottom for SPX?

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    Replies
    1. SPX bouncing for a few days then likely a lower low. A little lower to go yet imo.

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    2. So SPX did bottom on August 8, is that correct in your opinion? Do you expect SPX to rise for some time? Or at least until VIX bottoms at 10?
      Best

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    3. Yes SPX rising now for only short term. SPX rising for several weeks until VIX reaches 10's.

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  14. http://tinyurl.com/no7eauu

    please reread my August 5 post...a (good) opportunity to purchase UVXY should occur within days...keep in mind that the UVXY weekly trend is clearly up...the lows are history...

    http://tinyurl.com/n56onaf

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  15. "8/ 11/ 14: The TAO 8 is a zeroed oscillator, now falling from its highest peak, yet for all of early 2014 favors optimism. All declines have been brief and bought. The Russell 2000, frequently a trend leader, has shown the greatest weakness. And now with the steepening TAO 8 decline will come increased pessimism, depressing events, social unrest, political instability and asset vulnerability. The emerging equity season will favor falling leaves, and the selling of rallies."

    http://www.schulzonmarketcycles.com/index.html

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  16. New highs coming this week. Too powerful.

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  17. SC, 1st VIX yellow arrow complete or another leg up to go (corresponding to spx 1880's)?

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    1. The spike high is likely complete.

      UVXY down to $26 then pop to around $33, then under $20.

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    2. $15ish at the second yellow arrow low.

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  18. $15 UVXY @ second yellow arrow ...then spike o $150 first white arrow?

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  19. SCAugust 4, 2014 at 12:30 PM

    "I'd be a buyer of UVXY in the $25's."

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  20. Bought this morning at $25 and sold at $28.25.

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  21. VIX will likely trade around this level for a few days then decline to 10's.

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    Replies
    1. SC...once again, no disrespect intended...however, strongly disagree with your expectations for VIX and UVXY...good luck!

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    2. it won't be long before we know which of us is correct...the next 8 or 9 trading days should be interesting...

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    3. Other than the very short term our view is the same. This VIX Cycle is soon to turn extremely bearish!

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  22. Sc , u think spx goes down for a few weeks ?

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    Replies
    1. No, SPX should rise for a few weeks next, however the fall season looks very weak for SPX.

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  23. That's it for VIX. Obscene amount of money moving into AAPL today and out of BND bond etf. Bond rally is about to stop...too much selling on strength. Money goes into S&P...and europe money will also move to S&P. There will be no "correction" to 1800s, not this year. Maybe early winter 2015. This bull market is ferocious, it's established that time and time again.

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  24. There is support here for VIX at 13.50. Should pop to 15 next, then decline reaching to 10's around end of month.

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  25. how high do you think s&p will go if vix is at 10

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    Replies
    1. It may flirt with 2,000 but more importantly this VIX model is soon to turn extremely bearish.

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    2. you mean market bearish and VIX bullish? Thx

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  26. Sc, what happen to UVXY $26-33 prediction? Off table now?

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    1. Still possible, but probably only made it to $29 on Friday.

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    2. VIX bounced quite strongly, but UVXY only a modest bounce on Fri.

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  27. UVXY = ProShares Ultra Silver (ETF)????

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  28. Hi SC, can you clarify your views on the stock market rally you are expecting. You said on August 6 "Therefore, I am expecting a 2-month market rally to kick off soon - once this bottoming process completes.". But on August 15, you said "It may flirt with 2,000". SP500 is currently trading at 1980 so the upside is +1%. Your two statements seem to me contradictory. Can you clarify your views? Thank you

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    Replies
    1. The market rally kicked off and the VIX model continues to correctly predict the next moves.

      The rally should last another month or so, but much of the rally in price has already occurred. It'll be more of a grind from this point.

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  29. Replies
    1. interesting that the rally only lasted minutes...regardless, the VIX is moving toward a meaningful change-in-trend...

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  30. Hi SC, at the end of the rally, do you still expect UVXY at $15?

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    1. Should be close to that level. Check out the new chart posted!

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  31. New chart and analysis posted!

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