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Tuesday, June 30, 2015

XIV - Flashcrash Update

The comparison model suggested that volatility would increase and the market would become very choppy as the high forms.  The initial dip occurred yesterday which signals the start of this choppy phase. 

The model does indicate a slightly higher high in July/August though it should be considered possible that the high is already in place.  In any case the model suggests a bounce soon and the high re-tested, and up into mid-July next. 

At this pace the flashcrash is due August at the earliest and September at the latest.

Daily

193 comments:

  1. The dip yesterday signals the transition into a faster moving market. The next move looks to be upwards short term.

    It should be a good period for short term trading. I will wait for August to be aggressively shorting.

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  2. Do you know what the XIV targets are for July and Aug/Sept.

    Already breached $39 today. Is possible that 30's get tapped before proceeding higher?

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    Replies
    1. The model suggests XIV should pop to around $48 in July, dip to $40 and then a higher high around $52 is indicated.

      Then, when the flashcrash occurs XIV around $25. I think this is most likely in September.

      Delete
  3. Yes, we've had to tweak the timing of the model a little, and that's ok because everything else in the model is progressing nicely.

    For UVXY targets we're talking about a dip to $25 and a rise in September to around $75. That's a triple or 200% gain in a couple months!

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    Replies
    1. As expected Greece defaulted today. They call it in "arrears", it's a technical default. This is the largest country to default to the IMF.

      SCMay 31, 2015 at 1:30 AM

      "It seems June negotiations may have twists and turns but ultimately fail with Greece defaulting June 30th...."

      Delete
  4. VIX

    http://traderjoed.blogspot.com/

    ReplyDelete
  5. The market has been at this level for a week. Indicators have, in fact, become extremely oversold, therefore a strong bounce is due up into mid-July.

    SCJune 29, 2015 at 6:35 PM

    "The market should bounce a little here, but it needs to spend about a week before it will be sufficiently oversold to get a stronger bounce into mid-July.

    I'm long looking to exit mid-July around $48 XIV."

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  6. Notice VIX is making a lower high today.

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  7. So XIV $38's is a good entry in your opinion?

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  8. For a short term move it's a good entry point imo.

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  9. Hi, SC!! Where do you see the bottom is for Shanghai and Hang Seng index? How much rebound would you expecting for both indexes from that bottom? Many Thanks!!!

    ReplyDelete
    Replies
    1. Hi, Shanghai weekly chart looks very positive. It was very overbought so not surprising to see this recent dip, and doesn't impact the positive long term trend.

      It's at major support 3,500. Bounce to 4,300 short term. New high looks possible next year.

      For Hang Seng major support around 23,000. It can bounce to 25,250 short term.

      Delete
    2. Shanghai update with Bubble Cycle
      http://darellcharts.blogspot.com/2015/07/shanghai-update.html

      Delete
    3. Interesting, thank you!

      Delete
  10. SC, Based on your model, where do you see the sp 500 going to ?
    Thks

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    Replies
    1. The SPX Cycle showed a high around 2150 and the low to follow around 1980 to 2,000.

      I'm expecting a big bounce shortly and 2,000 or a little lower in September.

      Delete
    2. What happened to the flash crash that was to occur after July?

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    3. We're in the late stage of finishing the topping process. The high is due in August and the flash crash is due from that high according to the model.

      Delete
  11. No more bounces. It's over for now. Slow down at 2020, 2013, 1980.

    ReplyDelete
    Replies
    1. What's your time frame for 1980 to hit? Nice call last week for 2053.

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    2. Well, we do seem to have a bounce today. Is this one to be sold?

      Delete
    3. Hello Be Careful, what is next? You are seeing a higher high this summer?

      Delete
  12. SPX should rise according to the model for about 6 weeks here to reach our 2150 target. There should also be a soft spot early August with a little dip there.

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  13. VIX

    http://traderjoed.blogspot.com/

    ReplyDelete
    Replies
    1. EMINI

      http://traderjoed.blogspot.com/

      Delete
  14. Planning to hold my position for about a week. Price has some room to rise, then plan to go short for a dip likely around the end of the month and into early Aug.

    The model looks choppy for the next month but positive overall. Good time period to make some moves.

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  15. What are the XIV and UVXY targets? $48 and $28?

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    Replies
    1. Yes, for XIV around $48, then $41 should be tested, then up to around $52 in August.

      Delete
  16. Short term cycles are still positive until July 23/24. Little upside left though, and high likely next week.

    I'm looking to take profit soon, and short position next week.

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  17. Xiv exit at $48 or 52 next week? $52 is another 10% which would need Vix to spike low to 10's

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    Replies
    1. $48 to $49 next week and dip to $41 to $43 XIV by early Aug according to the model. Then the model does show a higher high in later Aug with a $52 target.

      Delete
  18. SC, what is your estimate of the next VIX high during July/August?
    Thanks
    Z.

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  19. SC, You say ST cycles are up til the 23rd, does your analysis still see another high this week before the larger pullback? I am trying to be patient with a short entry.

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    Replies
    1. Yes it does show another high later this week. So there is no rush to short, not much will happen this week. Having said that there is little or no upside either.

      Delete
  20. Replies
    1. XIV reached the $48 target. So yes I'll be looking to exit and build a short position this week.

      Delete
    2. SCJune 29, 2015 at 6:35 PM

      "The market should bounce a little here, but it needs to spend about a week before it will be sufficiently oversold to get a stronger bounce into mid-July.

      I'm long looking to exit mid-July around $48 XIV."

      Delete
  21. Gold nearing my $1,000 target. There's some downside in the Cycle here for a few months.

    Silver $12 this fall.

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  22. Took profit and sold XIV at $49.

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  23. Replies
    1. Thank you!

      It took patience but despite the Greek drama, China, Gold, Oil declines the model simply pointed higher.

      Delete
  24. Greece likely to dominate the media once again soon. There is no deal yet! They have only agreed to negotiate on a bailout. Likely to see some hiccups in that process.

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  25. The comparison model is turning negative. Next target is $41 to $42 XIV. We should see that tested by mid-August.

    Looking for an entry to short soon.

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  26. my july 8 call sucked.
    youre implying we go to 1980 right now then.

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  27. SPX target is 2,060 first half of August. The second half of August looks strong, quite positive.

    Overall the model does show weakness next into the first half of August, but still positive into late August.

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  28. What are your UVXY entry/exit points with XIV 41?

    Is the XIV crash to $25 still on track for this fall?

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    Replies
    1. UVXY should pop about 30%.

      Yes, still on track for September.

      Delete
  29. The market is due for softness here, but overall the model shows a rising market into late August.

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  30. Market has spoken! The market probably will bounce Monday, so next week should offer more short opportunities!!

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  31. VIX
    http://traderjoed.blogspot.com/

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  32. So fast. Interesting:

    "SPX target is 2,060 first half of August. The second half of August looks strong, quite positive. "

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  33. Yes nearly reached the 2,060 SPX target this morning. It should bounce for a few days next. Then lower into Early August.

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  34. XIV should bounce for a few days and then lower to my $41 target.

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  35. What's your guess on how stretched to downside this goes? 2020 gap or the infamous 1980 area. The blogs are all Bearish now....the tide....it would be downright funny for 2040 to hold this whoosh....again. Comical robot trading.

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  36. There's not much downside left short term. Maybe 2,040 for this low. This will only be a brief dip lasting into early Aug. From a low in early Aug, another sharp rally similar to the one in July.

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  37. Yes, by the time people figure out the pattern of these whipsaws then of course, as always, the character of the market will change haha!

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  38. Bounce looks likely for a few days. Should see a decent pop here.

    I do think the market will be lower in early August than today so I'll be looking to exit longs and short later in the week. The selling is just overdone right now.

    Overall the model is positive into late August.

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  39. Your XIV target in the last rally was spot on. The current XIV rally has started strong, is your target still limited to a $2-3 pop? Tx

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    Replies
    1. Thank you!

      Yes, XIV pop pretty much over, looking to exit and go short.

      Delete
  40. SC, how far do you think this rally today will go? Do you think the 50 day SMA at 2100 is the ceiling? Big move on XIV today, looking at an appropriate exit without leaving too much on the table. thx, Z.

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    Replies
    1. Yes, 2100 is a ceiling for now.

      Delete
  41. Just to clarify, is this the XIV move to 52 or is 41 coming first?

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  42. XIV

    http://traderjoed.blogspot.com/

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  43. Took profit and sold XIV at $47.10.

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  44. Replies
    1. Shouldnt your UVXY target be higher ? if you are looking for XIV 41
      ,then i would expect uvxy around 37-38.

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    2. Yes, but I expect a dip for UVXY from around $32. I plan to exit then re-enter for another move up to around $37 to $40.

      Delete
  45. SPX 2030-2040 in early August.

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    Replies
    1. The 200DMA for SPX has been tested and weakened. Therefore, should see a little below that next.

      Delete
  46. So for the roadmap, you see this move to SPX 2030 then a high around 2150 late Aug down to 2000 and continue up to 2350? Thanks!

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    Replies
    1. Yes, that is basically it! Probably see a little lower than 2,000. 1950-1980 looks possible.

      Delete
  47. Looks like the FED changes the scenario again, S&P through the resistance around 2105 and may try and touch the highs again.

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  48. Overall, there should be down pressure for SPX into August 14th. Counter bounces will be strong, but Daily Cycles look negative into that time frame.

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  49. XIV looking strong today @ $48....you sure this isnt the move to $52?

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    Replies
    1. I'm confident that we'll see weakness first.

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    2. We'll find out next week though for sure.

      Delete
  50. What's your take on Oil, where do you think it will eventually hit bottom? Thanks!

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  51. Since oil had a large move last year, no big moves up or down this year - its range bound. Probably see $35 tested this Fall or early next year which was the 2009 low. That should act as support for a moderate bounce during 2016.

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  52. Spx turning over but Vix & Xiv not cooperating...odd

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  53. Partly it's a sign of complacency. Also the model indicates that XIV should have a little upside this month. Considering how mature this model is, some unusual behavior is the be expected.

    This is an interesting and rare situation not for SPX particularly, but for volatility - since the model itself is specific to volatility itself.

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  54. At what point & price would you say XIV 52 before 42? Breach of previous high at $49? Or alltime high 50?

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    Replies
    1. $49.

      There is not much time left to maturity in this model. The crash is due to start this month and the deepest plunges are due in September.

      UVXY should see a little lower this month but considering the model, upside targets are around $75. I'll continue to hold UVXY.

      Delete
    2. Hi SC, Are you planning to exit UVXY around $32 and re-enter when dip then hold it till $75?

      Delete
    3. What would a $75 UVXY share translate into a VIX price? That's a big move from where we are now

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    4. There is a spot where I'll look to exit temporarily $36 to $40 first target. Dip then up to the next target around $75.

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    5. area of $40.96 (gap) is a likely first target...

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    6. VIX daily trend line indicates the 22.0-22.5 area is a likely first target...

      Delete
  55. You mean XIV has to reach 52 within the next couple weeks or 25 will be in play?

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    Replies
    1. The model does show a higher high for XIV around $52 this month. However, sometime the price truncates in these situations.

      Delete
  56. Xiv 49.25... Will continue holding until 52.

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  57. Hi SC, what is your stop loss on your UVXY postion? Right now, it seems that you're down about 10%. What is your risk tolerance? Best

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    Replies
    1. According to the model, XIV should have a couple dollars upside in August, and ideally UVXY should decline short term this month. Therefore, a stop on UVXY around $20.

      This is an unusual situation given the crash showing in the model. A wide stop is needed because we're in a volatile phase of the model as the high forms.

      Of course counterbalancing this is that the risk reward is exceptional. Potential downside of about $5 with upside of about $50 at this price.

      Delete
  58. There are solid indications that this model is going to continue to play out. The DOW has broken down below the 200dma, and the death cross is imminent next week. Apple is weak. Oil and Gold declines resuming. Etc...

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  59. XIV

    http://traderjoed.blogspot.com/

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  60. One short term Cycle I am monitoring that called the turns perfectly in July shows a decline for SPX into next week. This is the reason I've been saying decline into mid- August and then rise into late August.

    I may consider taking profit next week.

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  61. What target for TZA do you see for this pop by next week? Thx!

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  62. Hi, SC! Is your target price for uvxy next week still at $36 to $40? Spx at 2030? Thank You!!

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    Replies
    1. Probably not that much by next week.

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    2. Are you still looking to cover by the end of the week even the UVXY targets not met?

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    3. If it pops to $29 to $30 I may exit, but it's not necessary.

      Delete
  63. Re: XIV

    Move down to 42 then bounce to 52

    Or

    Truncated high @ 49.6 with move to 42 then 25?

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    Replies
    1. Most likely we haven't seen the high yet for XIV.

      Delete
  64. Sc are you expecting low in gold and silver at the end of august

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    Replies
    1. No, I think we'll see a low this Fall. Still some downside left.

      Delete
  65. Once Dow makes death cross will this nullify any further gains late August?

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    Replies
    1. The death cross will occur this week for the Dow so can see the market a little lower this week. However, the usual pattern is that the market short term bounces soon after the cross, then lower in weeks/months to come.

      Delete
  66. SC, what is your target price for UVXY if you exit next week? Thanks

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  67. A $30 uvxy target only translates to $44 xiv... When are you anticipating the XIV high @ 52?

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  68. The market will likely plunge soon, probably this week.

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  69. Death cross on the Dow today.

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  70. Now this blog is totally unclear???? Confusing. Perhaps simplify with number targets -- your projections on next substantial rally in indexes.

    We know you continue to insist on a big decline in the fall.

    ReplyDelete
    Replies
    1. Be Careful - SC is Trading, not Investing. Trading changes constantly. Investing is longer term.

      SC - Thanks for your valuable insight. It has confirmed my market bias. I am up over 100% in my volatility trading account for the year. Your comments are clear to me.

      Everyone - complete your own Due Diligence. Don't pass it on to someone else.

      Delete
  71. If market will be plunging this week, why only 10% upside in Vix/UVXY?

    ReplyDelete
    Replies
    1. Right now were in the choppy phase of the model. We're seeing the whipsaws shown in the model.

      Delete
  72. Hi Sc, could you please define what you mean by "Plunge". How low the SP500 could go in the next couple of days? Best

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  73. Just to be clear the market is plunging but only for a couple more days. The second half of August looks fairly positive. Then the crash is due to occur in September.

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    Replies
    1. The market is seeing the weakness according to the plan as stated in July.

      SCJuly 23, 2015 at 7:02 PM

      "SPX target is 2,060 first half of August. The second half of August looks strong, quite positive.

      Overall the model does show weakness next into the first half of August, but still positive into late August."

      Delete
    2. "Between now and the September 1st time period, I look for a stock market that grinds steadily lower – no crash – but a day-by-day erosion of the six year gains that preceded it."
      - Stan Harley, August 11, 2015

      Delete
  74. We're in the whipsaw phase which is why I'm trading in and out of both long and short positions. When the market is ready for a larger move, then I'll be holding for the larger moves.

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  75. SC, do you think that the 200 DMA for S&P will breached again? How much lower can it go? thanks
    Z.

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    Replies
    1. Little downside now short term. The model looks positive for the second half of August.

      Delete
  76. Great Call SC
    thanks for your valuable input and advice
    lets make some money :-)
    Cheers

    ReplyDelete
  77. SC - Your patience in trading, and addressing comments on your blog are amazing. This skill is probably what helped you become a successful trader.

    Day Trading (in and out) is far less stressful than holding overnight for me. This year I committed to working on longer swing trades. I have done it (successfully) thanks in part to you.

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    Replies
    1. Thank you very much for the kind words, and all the best!

      Delete
  78. Are you still expecting a very strong bounce in the 2nd half of August? What would be your target on SPX?

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    Replies
    1. Yes, may see as much as 2150 SPX.

      Delete
  79. SC, Good call on the downside. Mondays price action was discouraging, but you clearly held on to your outlook

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  80. http://safehaven.com/article/38552/stock-market-crash-bear-market-rally-in-gold

    this author and many others are expecting low on aug 18/19

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  81. Looking to exit my short position today!

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  82. Took profit and sold UVXY at $30.45.

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  83. Now that the market plunged, the model is turning bullish again. Next target for XIV is $52. SPX could see as much as 2,150.

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  84. Again, great trade SC, and thank you for answering our questions. You're the best!

    ReplyDelete
    Replies
    1. Thank you! We're just getting started...the market is about to become a lot more exciting!!

      Delete
  85. Well done SC. SP500 is @2,053. How low do you think it could go during this first half of August? Thank you

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    Replies
    1. Not much lower, SPX should be forming a short term low here next 2 days. SPX probably will hold the July low or March low 2,040 during August.

      Delete
    2. Not much will happen the next 2 days either up or down. Then after that is should run up hard.

      Delete
  86. I'll be exiting XIV this morning.

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    Replies
    1. I'm not convinced it bottomed yesterday. So will play it safe here.

      Delete
    2. Sound like a good idea, since there is significant one day profit here and market is still whipsawing. Do you think there will be a lower low tomorrow or next week? thanks, Z.

      Delete
  87. Good morning SC ,
    excellent calls , keep them coming....
    Have a terrific day :-)

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  88. We'll see what happens here. Generally the market should be turning more positive. XIV may have bottomed but probably will slide to retest $44.50 or so before rising.

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  89. Replies
    1. Took profits and will sit and wait on the sidelines. The market likely needs to consolidate for a few days.

      Delete
  90. VIX

    http://traderjoed.blogspot.com/

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  91. With the recent bounce in gold, is your opinion still down for gold?

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    Replies
    1. Yes lower Gold by end of September.

      Delete
  92. Nice trade SC, do you still see the 14th as the last day of negative cycle in your short term Cycle?

    ReplyDelete
    Replies
    1. Yes, Cycles are turning positive for about 2 weeks. The first week of September looks negative again.

      Delete
  93. Are you looking to buy back XIV today? Thx!

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    Replies
    1. I'll probably wait for Monday/Tuesday. My indicators don't look quite ready for XIV. I think it could slide back to around $45.

      Let's see how things shape up next for a day or two.

      Delete
  94. some people calling for bottom on aug 18/19 and then higher till aug 29

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  95. Sc, Are you able to share some thoughts about crude oil and China markets? Are they both consolidation yet? Thanks

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    Replies
    1. Crude can bounce soon, but then see $35 tested this September.

      Delete
  96. What do you think will happen with equities the rest of this week SC. Still waiting on a low or rally already started?

    ReplyDelete
  97. http://www.marketwatch.com/story/market-timer-tom-mcclellan-sees-stocks-set-up-for-ugly-decline-as-early-as-thursday-2015-08-17?siteid=yhoof2

    ReplyDelete
  98. this 1 is awesome

    https://www.youtube.com/watch?v=E1xqSZy9_4I

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  99. The market can see some weakness first but I am expecting a higher market around month-end.

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  100. Waiting for an optimal setup either short or long.

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  101. Hi, SC!! Did you go back in Xiv? Do you see now 2073 is the low for spx n raspy toward end of next week? Thank You!

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  102. XIV indicators starting to look better, needs a little more time, may look to enter in a few days.

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  103. SC, with the crash in September coming, do you think it's a bit risky to jump on XIV? Thanks!

    ReplyDelete
    Replies
    1. Indicators are moving into a quite positive configuration for XIV. It should run up for 2 weeks. It's also a strong spot in the model for XIV. I do tend to agree that caution is necessary, and it would not be smart to attempt to push it too far.

      The target area according to the model is $52 possibly a little more. Probably not a good idea to try to push it beyond about $51.

      Delete
  104. Looks like today might be the day, XIV $45.25 pre-market.

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  105. Yes, planning to take a position in XIV today/tomorrow.

    ReplyDelete
  106. It did slide and we're at $45 today. Indicators look almost perfect for XIV!

    SCAugust 14, 2015 at 5:47 AM

    "My indicators don't look quite ready for XIV. I think it could slide back to around $45.

    Let's see how things shape up next for a day or two."

    ReplyDelete
  107. Well looks like entered just a little early. XIV looks like it wants to test trendline support from Feb which is around $41. Will just sit and wait for it to pop above $50.

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    Replies
    1. What would the $41 level translate into for S&P.
      Thanks
      Z.

      Delete
    2. Not much lower 10-15 points maybe. See the new analysis posted.

      Delete
  108. Do you still see 2150 for this pop on S&P or lower target now?

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    Replies
    1. It could reach it, the model still remains positive.

      Delete