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Thursday, August 20, 2015

XIV - Triangle Formation

The model for XIV remains positive, therefore the market should be forming a low shortly. 

XIV has cooled off and is trading near trendline support.  As well a triangle formation has formed and according to the model, the next push up should be quite strong.  It's likely to surge up and out of the triangle to the upside, and break out of the fork.

The behavior of the market has been consistent with the choppy sideways phase of the model which started early in July.   

Notice that XIV is forming a higher low with July.  This contrasts SPX which has a lower low from July.  This is bullish for the market! 

Daily Chart

32 comments:

  1. Where do you see we at on the XIV Flashcrash chart from the last update?

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    1. On the model just before the high, it dips. We've progressed four candles since the last update. Two more to reach the high.

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  2. Hi, SC!!! Thank you for the update. Do you see the rally starts beginning of next week? N how fast would the market reaches this next top? Would the following low hit 1950? Thank You!!!

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    1. The market will probably need a few days at least to consolidate and then the rally should start next week. The next high first half September.

      Let's take it one phase at a time. We'll be in this choppy phase for weeks to come. Then once everything matures, let's consider the downside targets.

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  3. It will take a few zigzags to shake everybody off, swing bottoms dont usually turn on a dime

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  4. Talking financial head Tom Lee has been right for several years, he thinks 2300 end of year S&P. I'm not convinced. Right now I think back and forth...1980 to 2050s to October low of 1900s........1904 gap down there. Maybe 1920s. Oil is a proxy for the S&P now and will cause a rally if and when...I think it pretty weird that it goes directly to the $35-37 mark...but completely possible on sentiment and nasty shorting algos...overnights.

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  5. Price reached the white trendline this morning.

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  6. Bought more XIV at $40.35.

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  7. Are you fully positioned? Or you have planned to accumulate more XIV?

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    Replies
    1. Yes, fully positioned so not planning to accumulate more.

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  8. VIX

    http://traderjoed.blogspot.com/

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  9. Looks like the XIV's 200 DMA could be tested at around $38. Let's see if it bounces here. It is getting really ugly out there!

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  10. SC, is it possible the flash crash started early?

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    Replies
    1. It's not possible because the choppy sideways phase from July is nowhere near completing.

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    2. XIV is above the July low, still showing relative strength.

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    3. SC, be careful with not possible as anything is possible..for some reason I thought you initially had the flash crash in August in older posts?

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    4. If started, there still should be a big bounce after the initial drop according to the crash chart.

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    5. IWM already green once, nice candle forming.

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  11. 1970s gap. XIV to be destroyed in short term.

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  12. Looks like a flush out today, so bottom should be near, either today or Monday. Extreme over sold conditions now.

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  13. Take a look. VIX is above the July VIX high, but XIV is above the July XIV low. That's interesting...

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    Replies
    1. The same thing happened a month or two before the 2011 crash.

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    2. So things are progressing but not ready for a major move yet.

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  14. 1972 gap will be filled. 50% retrace up after. possible retrace starts earlier. eventually 1972 will be hit. any rally capped at 2040-50 through september.

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  15. Should make it to 1927 in days weeks. Or next week! Ha.

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  16. Hey SC, this sudden carnage in the last couple of day wasn't expected. Do you think this changes the picture a bit. Technically, the market couldn't get any worse.....or can it?

    Thanks
    Z.

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  17. Does today's drop change your S&P target for Sep?

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  18. Hi, SC!!! With this dramatic fall this week, is it possible the timeline has moved up? Does this fall alter your roadmap?

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  19. We're still nowhere near the crash, but because XIV broke below the white trendline that does change things slightly.

    We're in the choppy phase of the model, so will continue to trade both short and long until the model matures.


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