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Sunday, November 9, 2014

$VIX - Cycle Update

VIX is at the gap, and also near the trendline.  Therefore, a bounce for VIX is likely soon.  It might fill the gap first though.

It was an exaggerated spike in October, but it is apparent that the Second Yellow Arrow low is ahead.  The August high for VIX was too flat.  The spike in October fits the Cycle much better even though VIX overshot the blue arrows with surprising strength.

Expect some bounces, but VIX should see lower levels tested to form the Second Yellow Arrow low in the Cycle.

Daily Chart














VIX Cycle 1:




112 comments:

  1. I do think VIX is heading lower, but also that there should be some decent bounces in VIX to trade. So I'm just trading in and out until this sets up properly.

    It takes patience. The Cycle shows the largest move since 2007 setting up for VIX.

    ReplyDelete
  2. Thanks for the potential scenario.

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  3. SC, if Vix fills the gap at 12 first, what is to stop it from immediately proceeding to the white arrow high? Wouldn't filling the gap meet the criteria of the second yellow arrow?

    ReplyDelete
    Replies
    1. Every move in this Cycle takes months. I would expect it to take more time to complete the Second Yellow Arrow low. As well, short term charts suggest more downside for VIX later this month. For example VIX is not even oversold on daily rsi.

      However, a decent bounce is likely for VIX soon.

      Delete
  4. SC, you were expecting decline to start from end on Nov to Dec. Does it still hold good or it is postponed to Jan. Also, are expecting market to go higher thant 2050

    ReplyDelete
    Replies
    1. We do need to allow some time for the Second Yellow Arrow low to form for VIX. I expect there will be some chop that will take time but also good trading opportunity as the low is forming.

      I do expect the market to see higher than 2050.

      There are negative Cycles for SPX this month and next. So there will be sizable dips.

      Delete
  5. VIX will likely bottom out first and then SPX top afterwards.

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  6. I have lots of charts prepared, and ready.

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  7. VIX gap is filled now, should see a decent bounce for VIX this week, probably into Thurs.

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  8. SC, you seem to be changing the forecast like a weatherman. Are we working on the 2nd yellow arrow now, were you jumping the gun on your 2nd arrow call before? Thanks.

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  9. VIX 9 before February. NYAD will make a new high sooner rather than later. This blog's forecast...ehh....disagree completely. It's just not coming to fruition.

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  10. Well it seemed the second yellow arrow low was in place when VIX spiked over 22. It wasn't.

    The Cycle did show a spike. The spike in VIX was exaggerated.

    Yes, VIX is approaching the second yellow low.

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  11. The fact is that the VIX move is going to be larger than I had originally thought. That's because it went to 30 on that little blip...

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  12. Hmmmm....i can see how the 2nd yellow arrow was mistaken given how the blue arrows didnt get over 20.

    If 30 Vix is a little blip then first white arrow should be very interesting indeed... Vix 70-80 not out of the question!

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  13. VIX

    http://traderjoed.blogspot.com/

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  14. This blog is like a VIX conspiracy theory. I agree with Tom Lee, he says up to 2300 by spring. This blog will most likely go quiet.

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  15. Nice bounce for VIX as predicted.

    SCNovember 10, 2014 at 7:51 AM

    "VIX gap is filled now, should see a decent bounce for VIX this week, probably into Thurs."

    ReplyDelete
    Replies
    1. Bounce from vix 12-14 was not significant enough.

      Delete
  16. I'll wait a few more days and expect more profit. VIX 16 coming...

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  17. Hi SC can you please update your S&P charts & comments short and long term going forward.

    Many thanks

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  18. Yes, will update the SPX long term Cycle. It shows the spike down in October very clearly, and what is next.

    The short term SPX Cycles are negative for a couple weeks.

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  19. SC do you think gold and silver have bottomed. or silver can still got to 13

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    Replies
    1. More declines to come for the metals.

      Delete
    2. This comment has been removed by the author.

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    3. This comment has been removed by the author.

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  20. 2050 next. We are not going DOWN. Today will close 2043-44.

    Be Careful
    October 31, 2014 at 11:22 AM
    We'll poke the top trendline 2030-2050 sooner rather than later. This whole episode has just stayed within the 2011 top and bottom trendlines basically...we almost hit the bottom near 1820..and now to the top.But overkill is closer to 2100..also the target of many talking heads.

    ReplyDelete
    Replies
    1. Be Careful, are you serious??

      Have you checked market breadth?.........this market is going to fall very very hard and very soon!
      This is NO longer a healthy market, in fact quite the opposite. Market breadth is the worst in possibly over a decade.

      Delete
  21. 3 outcomes until Dec 31.

    a) correction to 1994, this is probably going to happen.
    b) correction to 1925, possible but not likely at all.
    c) correction to 1904, this will not happen. 7% pullback? would require a global catastrophe. will not happen. absolutely not.

    We will not close below 1925 the rest of the year, as stated earlier. What the VIX does is irrelevant, divergence...who cares? Breadth divergences across market will be of no consequence. Market sideways to mild down at worst. Best case 2070-2100 very soon.

    Once again, I expect this blog to post a bullish forecast until at least late January.

    Gold is not going below 1100 anytime soon. Waffle back and forth here or a tiny bit lower.

    Oil may touch 68-70 at worst.

    Look, the fact is ECB and BOJ will be firing money at any deflation threat for months to come (not to mention the interest rate control). Recessions will make them keep rates down...and apply all kinds of cockamamie stimulus plans. This idea that market breadth/"cycles" is going to offset trillions of dollars of global liquidity and zero interest rates is incorrect. Stop being logical.

    ReplyDelete
  22. I think SC is onto something here. Weight of evidence shows significant downside risk. Only thing left is for price to roll over.

    http://opportunityidentified.com/2014/11/17/risk-on-or-risk-off-weight-of-evidence-part-4-of-7/

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  23. SC, have you traded professionally, for a firm/broker etc? Do you have professional experience in the financial industry, in what capacity?
    Thanks.

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  24. was that the VIX pop yesterday? did you sell your UVXY position?
    or do you still expect a further pop in the VIX before the next low?

    thanks

    ReplyDelete
    Replies
    1. VIX 16's coming. Tues/Wed next week should mark a VIX high.

      Cycles are negative for SPX into that time frame. I'm holding UVXY and plan to exit at that time.

      Delete
  25. Hi SC, what's your take on the recent stock market action? It seems that the market wants to make new highs before consolidating sharply? Thanks for any update

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    Replies
    1. Significant dip for SPX into Tues/Wed. Cycles show clear weakness into that time frame.

      Delete
  26. There's a Bradley turn date on the 22nd. They have been pretty accurate this year.
    http://thekeystonespeculator.blogspot.com/2014/11/bradley-turns-for-2014.html

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  27. sc, significant dip by next week tues/wed

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  28. VIX formed a higher low yesterday and looks strong into next week.

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  29. sc, can u please update your charts for spx and gold

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    Replies
    1. Yes, I will, SPX is particularly interesting.

      I believe Gold heading lower for a couple months yet. No low in sight.

      Delete
  30. SC, just saw your comment, for next week tues/wed high in vix
    Are you expecting higher high in spx in early dec

    ReplyDelete
    Replies
    1. I'm expecting a high next Tues/Wed for VIX, and a lower low for VIX in December.

      Delete
  31. Remember this is an environment that the Cycles suggest strong short term bounces for VIX, but it needs to decline to the yellow arrow low for the large move. I'm trading these bounces until the yellow arrow is mature. It will take time and It'll be an exceptional situation once that matures.

    I am pleased to make some profits while waiting for that to set up properly.

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  32. SC, when are you expecting high in spx, is it dec or jan now

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  33. I'll just show the SPX long term Cycle and you'll be able to see where we are at and what is next.

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  34. On track for $25 UVXY Tues/Wed.

    ReplyDelete
    Replies
    1. The only thing I would have done differently with the current trade is that had I waited 1 extra day and entered on Nov 10, I would have had the perfect entry price and timing.

      Delete
  35. UVXY 21.41 next. In a day or two.
    S&P probing 2060+ next. Probably all of this tomorrow.

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    Replies
    1. Be Careful called it....premarket UVXY looking ugly.

      Delete
    2. great call Be Careful
      I sold UVXY yesterday morning when VIX touched 15.75, its 50 day MA, also its upper BB
      there is support here for the VIX at 13 but I think I will wit till it pierces its lower BB possibly on Monday

      Delete
  36. Central Bankers have overstepped the mark. Their role has never been to intervene in markets, as per Draghi's comments today.
    His statement is a clear admission of market manipulation and I can not believe that it is allowed to go unchallenged.
    The most annoying thing about this whole market is that non- thinkers are now rewraded. You don't need to be a thinker anymore to make money in markets. Just one of the sheeple.
    BTFD wins again and again and again.

    ReplyDelete
  37. UVXY 20.50 premarket. You stopped out? How big is your position may I ask??

    SCNovember 7, 2014 at 11:16 AM
    Bought UVXY at $22.95.

    Be CarefulNovember 20, 2014 at 9:06 AM
    UVXY 21.41 next. In a day or two.
    S&P probing 2060+ next. Probably all of this tomorrow.


    Be CarefulNovember 14, 2014 at 10:09 AM
    2050 next. We are not going DOWN. Today will close 2043-44.

    ReplyDelete
  38. SC,

    Has shifting of the 2nd yellow arrow potentialy invalidated all short term signals?


    I refer to the uvxy chart posted oct with green arrow anticipating $75-85 as well as short term move to $25 which never materialized

    ReplyDelete
    Replies
    1. No, there will be a better bounce coming for VIX.

      Delete
  39. I don't know when SC is expecting the high of 48 in vix. But Robert Mcdough and http://www.exceptional-bear.com/resources/Investment+TIPS+for+the+current+Bear+Market+Nov+19.pdf both expecting it can start anytime. But December is seasonally strong period. Some are expecting 1st two weeks as mild correction with another high early Jan.

    SC , it will be helpful if you can update your charst. thanx

    ReplyDelete
    Replies
    1. Eduardo Mirahyes' forecast for 2014 calls for an end of year price of 550 on the DJIA...that is not a typo...get real! Mirayes has been calling a market top for years...read his forecasts for yourself...an expert he is not!

      http://www.exceptional-bear.com/

      Delete
    2. I took his trial offer about a year ago and he was saying to go all in short. All during the trial the market kept going up. Luckily he gave me a refund and I didn't take his advice

      Delete
    3. I am not a subscriber of Eduardo Mirahyes but used to check his updates regularly on stockcharts. He used to give 60min charts with rallies and corrections. But he has stopped doing now. He is just showing a general trend with a severe downtrend starting in Dec. It does not mean it will all happen in dec. Robert Mcdough is also calling top anytime between 17700 to 18300, now or early Jan.

      Delete
  40. VIX still holding it's low from Nov 11th. 2 weeks now.

    ReplyDelete
    Replies
    1. UVXY will continue to decay even if the VIX holds at these levels as the premium in the VIX futures disappears. Better hope volatility increases soon otherwise Pro-Shares will reverse split UVXY to SC's anticipated targets.

      Delete
  41. how low you are expecting on uvxy, and app when

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    Replies
    1. UVXY is not ready to hold yet for longer time periods, but I do expect several good trades in December. I'll post when VIX is at the yellow arrow and UVXY is safe to hold for big upside. There is great value in UVXY already, but my goal is to increase upside to the maximum with the best possible, optimum entry.

      VIX testing near the Sept low and setting up to pop again soon.

      Delete
    2. Come on SC, nothing developed in November as you predicted. Your holding a 16% loss to date on your UVXY position. Your vague cycle charts of the VIX and UVXY with the colored arrows have proved to be less than reliable. For those that are holding UVXY, I hope December will be different. But, if the VIX holds at 12 until the December VIX futures expire, be prepared for UVXY to hit 14.

      Delete
  42. Hello from Spain,i am believe that cycle can are in top near index here,dax,eurostox50,ibex can are finísh the rally from 16 october.
    Stockmarket can up few days moré in left but here is danguer began trend down this winter.A rally december is not easy,And january can are moré weak,time is out 1 week december.
    1 And 19 december next days probably point inflexión in eurostox50,dax.
    Bye.

    ReplyDelete
  43. VIX pierced the lower Bollinger band today, so I picked up some UVXY.
    hoping for a pop

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  44. Should see my 16's VIX target tested this week. UVXY $24's.

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    Replies
    1. Really.....UVXY crushed (-11.2%) closing in the 19's.

      Delete
  45. Vix second yellow arrow complete :)

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    Replies
    1. Not quite yet imo, but VIX should pop further here.

      Delete
    2. VIX crashing again. Guess the pathetic pop to 14 is all we get?

      Delete
  46. maybe on futures.....at any rate, I'm hoping you are right so I can have a profitable trade.

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  47. This comment has been removed by the author.

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  48. Hi SC can you please update your S&P charts and analysis.

    Thanks

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  49. SC, can u please have some new updates and charts

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  50. A short down is easy to finísh next week4-5% before a little up in Europe market.Sell is the Big play believe.
    Bye.

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  51. VIX

    http://traderjoed.blogspot.com/

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  52. A trading range has developed in VIX 11 to 14. Rattle around in this range for a while longer, might see a dip to test 11 then bounce to 18.

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    Replies
    1. .....and UVXY continues to decay now in the 18's.

      Delete
    2. XIV not looking good either... Lower highs and lower lows since July...first time since 2011.

      Its next cycle will be telling. If 24 does not hold watch out!

      Delete
    3. The long term chart of UVXY tells you how toxic it can be after each spike. On October 20th when SC opted not to buy XIV (@ 30.48) in favor of the "big money" in volatility, the long term charts said there will be an extended period before the next spike. At this moment the XIV is trading at 40.65 and the UVXY is at 17.62. Still want to put any faith in cycle charts with arrows pointing to candles that have no values and no time frames?

      Delete
  53. Is it not possible that second yellow arrow was correct & Vix move to 30 was the white arrow?

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    Replies
    1. No, because VIX would have stayed elevated after the white arrow if that was the case.

      Delete
    2. SC, how can you say that a scenario is not possible? No one can say that!

      Mr. Market fixes stubbornness in people very quickly.

      Delete
    3. If that scenario plays out, then VIX rises to retest 30. Time with tell.

      It doesn't really matter much at this point since both scenarios show VIX rising dramatically.

      Delete
    4. VIX already rose dramatically and collapsed completely.

      First VIX chart shows support line between july and november. It broke down below that level.

      Your cycle is not working. Simple. The timing is completely wrong!

      Delete
    5. How much longer to yellow arrow then?

      which Vix move is the anomoly after the first yellow - move to 18 or 30?

      Delete
    6. The move to 30 is the spike after the first arrow. VIX is still in the declining phase to the second yellow arrow low. Things are moving slow. I am expecting the second yellow arrow low mid-March.

      Delete
  54. Have to shout out to Becareful as he was the one correct here.....too much momo flowing for bulls.....good call

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  55. Hello SC. I hope you're well. Regarding the yesterday's market action; have you revisited your VIX forecast?
    Are you still convinced that VIX has to go much lower, let say 10.5, before surging significantly?
    Thanks

    ReplyDelete
    Replies
    1. Same outlook. I am expecting VIX to bounce higher in the short term.

      Might see 20 on this bounce for VIX, however, this is not the start of anything major.

      Lower levels will be tested for the second yellow arrow low due around mid-March at the slow pace things are progressing.

      Delete
    2. SC...not a clue how you arrive at your targets or which alleged cycles you are considering...however, do know that you consistently move the goal posts...as of today, expect the following (minimum) prices to be hit: VIX - $22.49 & UVXY - $41.75

      on another note, have been reading this blog for more than a year...find it difficult to believe that you are genuinely making money trading UVXY or other VIX related ETF's...

      Delete
    3. Is UVXY $41.75 corresponding to VIX $22.49?

      Delete
  56. VIX should be rising for several weeks here.

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  57. VIX probably dip a bit to 15 in 3 or 4 days then up to 20.

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  58. Resistance become support. 14 to 15 now strong support for VIX.

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  59. Any comments on the failed gold short? We are back above 1225 level, back above 1180 and 1140 levels.


    -------

    SCNovember 5, 2014 at 3:58 PM

    More downside. Can see pauses for the metals, but basically straight down.
    SCOctober 30, 2014 at 10:03 PM

    Gold/Silver have much more to decline, with the dollar rallying for weeks yet to come.
    Reply
    Replies

    SCOctober 30, 2014 at 10:04 PM

    Gold closer to $1,000 soon. It'll accelerate down.

    SCOctober 31, 2014 at 10:08 AM

    Silver hardly bounced at all in Oct. Gold did bounce to $1,250 in Oct. Then once it breached $1200, the waterfall is underway...

    ReplyDelete
  60. SC, the time lag between the orange/red arrows, red/purple, blue arrows each averages 3-4 months. Now yellow arrows which have the shortest distance you are stretching out to 9 months!? (July 14-march 15?)

    This really makes no sense. There seems to be a very poor correlation between the cycles and the performance to date. Unless there really is no correlation and you are forcing things to fit.

    I believe a bounce in VIX is due imminently, however the VIX cycle posted no longer seems relevant. perhaps thrown off by too much central bank intervention?!

    ReplyDelete
  61. Top in Europe And weak stockmarket in the world,greece 13% down,few days after 5 december.
    Joed You predictions in índex vix are good,with others systems,win millions$.
    Bye....

    ReplyDelete
  62. Every move has happened according to the Cycle for more than a year as shown. The VIX Cycle just simply works.

    Each bar in the Cycle is taking about a month. The timing was accurate. It took 2 months from Oct high to Dec low. 2 bars. Perfect!

    I posted the chart above showing the second yellow arrow low to be due end of Nov. VIX hit the low Dec 5th. I'm very pleased with the performance.

    The Cycle shows a couple more bars before the big move begins in VIX. The Cycle says that VIX will just bounce along the bottom for a couple months.

    What I'm saying is that VIX hit the second yellow arrow low this month, and will be at the low for a couple months as per the Cycle.

    I do think VIX can see 1 point lower at 10.50. For VIX that is insignificant but for UVXY a couple months amount to lower levels. So it makes a big difference for UVXY.

    Just have patience!

    ReplyDelete
  63. The UVXY position was taken specifically for this VIX bounce as explained with the chart.

    So I plan to exit in the next few days. Should see a bit more $25 to $26.

    I have another 5 or 6 trades planned next.

    ReplyDelete
  64. SC, if I may, you bought UVXY at 22.95 on November 7. Since then, a low has been reached on December 5 at 18.27. It means that you were willing to accept a risk of at least 20%. If your target price is $26, it means that your expected reward is less than 15%.
    Your trade does not exhibit a pretty good risk/reward profile. I don't understand how you implement your trade. Could you elabore a little bit more on that? Thank you very much. Best

    ReplyDelete
    Replies
    1. Look at the chart and analysis Nov 9th:

      "VIX is at the gap, and also near the trendline. Therefore, a bounce for VIX is likely soon. It might fill the gap first though."

      The trade was placed at the top of the gap. At that time I wasn't sure if the VIX gap would fill or bounce first. The trade didn't need to be perfect because the Cycles were showing a large enough bounce to make it worthwhile. The gap did fill and so, yes, my entry was a little early, but obviously the result was worth it.

      The trade should be good for about 30%. I'm pleased with that.

      Delete
  65. Out UVXY after hours. A couple more grey hairs but made money. Can't complain.

    Be Careful and Bobo Mik - The investment vehicles discussed here have some pretty volatile swings (15% daily sometimes). How do you use stops on something like this? I haven't figured that out yet if you agree to share your strategies I would be grateful.

    Patience is bitter, but it bears such sweet fruit.

    Good trading everyone.

    ReplyDelete
  66. SC, you stated

    "I posted the chart above showing the second yellow arrow low to be due end of Nov. VIX hit the low Dec 5th. " Dec 11,2014

    "Lower levels will be tested for the second yellow arrow low due around mid-March at the slow pace things are progressing." Dec 09, 2014

    One statement says yellow arrow due March and other one says it has already been filled....but still going to go back & retest 10.5 by March?!

    How is that even possible with the original cycle chart showing higher highs & higher lows from second yellow arrow? Should move progressively in the 20-50 zone if second arrow in on Dec 5, no?

    ReplyDelete
  67. The Cycle shows 5 bars to complete the low before VIX breaks out. That's going to take some time. Basically the Cycle shows VIX bouncing up and down here for a while before it breaks out above 30.

    Let me update the charts and can explain in detail.

    ReplyDelete
  68. Detailed charts coming.

    I'm updating the SPX Cycle. Working beautifully, very impressed with it, and I think it will do an excellent job at showing what happens next!

    ReplyDelete