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Friday, October 3, 2014

$VIX - Second Yellow Arrow Low

It does appear that the Second Yellow Arrow Low is in place.  As well, VIX pushed up quite strongly from the low giving confidence to the Cycle continuing to play out.

VIX is currently testing and finding some resistance at the historical red line resistance.  VIX will likely be choppy for a few weeks next as it can continue to test the resistance before breaking out in late October.

The Cycle shows a massive spike up into a December high.  October looks moderately weak for the markets with a downward bias.  November is likely to be the worst month according to the Cycle.

Daily Chart
















Before (Aug 1 chart analysis):

Daily Chart
















VIX Cycle 1:
















38 comments:

  1. There are 2 possibilities short term.

    Either VIX pops to 19 next week, or it just continues to slide down to retest 12's 11's mid October.

    Either way VIX should rise strongly in late Oct, Nov, Dec.

    ReplyDelete
  2. If it pops to 19 next week, do you expect it to come down again before rising strongly next in late Oct - Dec?

    ReplyDelete
    Replies
    1. Yes, if VIX pops to 19, then I expect it to rattle up and down in the 15 to 19 range for a couple weeks anyways, then rise strongly.

      Delete
    2. VIX 11's or 12's seems more likely.

      No matter what it does short term though, the market has a lot of energy right now. This suggests to me that the big VIX move is coming. The Cycle looks to be confirmed.

      Delete
  3. I'm confident that the June/July VIX low will hold, but VIX can retest the lows.

    The Cycle only shows VIX surging in Nov and Dec. Oct the VIX can be weak.

    ReplyDelete
  4. Gap filled for UVXY today. Next week should be interesting. I'll take profit if it pops to $31.50.

    ReplyDelete
  5. I looked at all my charts and Cycles including short term ones that I use. Everything looks negative for SPX for a week. A pop in the VIX does look likely for a week. Probably test 17 to 18 in a week's time.

    ReplyDelete
    Replies
    1. Short term, at best, UVXY can rise to form a double top around $33 in a week's time.

      I plan to exit in the $31 to $32 range.

      Delete
    2. Basically the next few days will likely be slow with consolidation, and then the 50 day Moving Average will start pressuring VIX higher as it rises. This will take about a week.

      Delete
  6. VIX

    http://traderjoed.blogspot.com/

    ReplyDelete
  7. Sold UVXY at $31.90 from $28.15 entry.

    ReplyDelete
    Replies
    1. Congrats SC on your gain.

      You thinking now it will drop to your VIX 11 or 12 for the rest of october?


      Cheers!

      Delete
    2. Thank you. The same Cycle that suggested a double top for VIX, which it has done now, is showing a steep drop next for VIX. There is a large gap for VIX in the 12's which is likely to be filled this month in my opinion. Even 10.50 to 11's VIX is still quite possible.

      Short term I am expecting a strong rally for markets lasting into early Nov.

      Delete
    3. Sc, what level uvxy re-entry with VIX 12? $20-22?

      Thanks!

      Delete
    4. Yes probably around $20. Bounce there then potentially down to $15.

      Delete
    5. I don't know if it will get under the rising 50 and the 360 smas

      volatility is now a scalp trade, the 180sma on weekly is the resistance...

      Delete
  8. SC,
    Really appreciate your updated post on your transaction. Will you do this whenever you buy/sell UVXY/XIV?
    Thank you!

    ReplyDelete
    Replies
    1. Thank you! Yes, I will be posting these going forward.

      In the past I haven't posted smaller trades like this, but I'm thinking I'll just post them going forward.

      Delete
  9. This kind of choppy market is the perfect environment for using Cycles.

    ReplyDelete
  10. Why so low for UVXY if VIX already made second yellow arrow low?

    I thought VIX will be creeping up rest of Oct with spike to white arrow by NOV.

    ReplyDelete
    Replies
    1. In the Cycle Oct just looks choppy. As well the Cycle shows the move up for VIX starting in Nov. So that gives some time from now into Nov that VIX can settle lower.

      Remember VIX moves fast when it's ready. In 2011 it only took 2 weeks to spike over 45. Our Cycle high is not due until mid-Dec.

      Delete
  11. VIX now testing just over the red resistance with an overshoot. Not ready to break out yet imo.

    Could see a deeper dip for VIX but at least VIX will remain choppy in this 15 to 19 range for much of Oct.

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  12. I am trading this chop until I see that the VIX is ready to breakout then I'm going to just hold positions.

    ReplyDelete
    Replies
    1. Hey SC

      nice entry, do you have a target in mind to exit XIV?


      Cheers!

      Delete
    2. Looking for VIX to settle back to 15 to 16. XIV $38's.

      Delete
  13. Market a little lower today, but a lot of support, setting up to bounce with the VIX stretched.

    ReplyDelete
    Replies
    1. Hi SC

      you expect your XIV target to be reach next week or next month?


      Cheers!

      Delete
    2. S&P either bottomed today or Monday/Tues imo. The charts and short term Cycles I use look surprisingly bullish for weeks.

      Delete
  14. SCOctober 3, 2014 at 6:08 AM

    "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."

    ReplyDelete
    Replies
    1. I thought UVXY could reach $34, but I took profit at $31.90. Just didn't want to push it.

      Delete
  15. Sc, move up to white arrow early for VIX...no retest of 12 imho.

    ReplyDelete
  16. unless we get a bounce off Aug lows & form the right shoulder to the end of Oct

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  17. Alright, market has spoken. Choppy and down. I have charts coming to show what is likely next with detail.

    ReplyDelete
  18. Sc, will you exit XIV at a loss or still confident of $38 ?
    Thks!

    ReplyDelete
    Replies
    1. I do expect a small pop for XIV early next week and plan to exit with a small loss.

      It's simply to time to adjust to a bearish stance. There will be better spots for XIV in a week or two.

      Delete