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Wednesday, January 20, 2016

XIV - Testing Turquoise Support

It was an interesting reaction to the turquoise support today for XIV.  This is a significant support for XIV, and should create a floor for now.  VIX was quiet.

A sideways shuffle is to be expected for weeks next to burn some time with mild short term upside.  During this period red line resistance is likely to be tested several times.  February Cycles looks weak until later February so downside in February is possible.

It will get more exciting with some time once XIV is in a position to finally clear the red resistance.      

4hour Chart
 

43 comments:

  1. A clue today was VIX barely made it higher than Friday's high. I noticed that on my weekend update - no action on VIX.

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    Replies
    1. Sideways and a slow grind up next likely into end of January.

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    2. Contango is the headwind, we need to wait for its becoming tail wind. XIV will have less correlation with VIX with this contango. It will be hard to make money out of it.

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    3. XIV should hold well for the remainder of January, but see a bit lower in February. The bulls need to make it through February before the market is in a position for large upside.

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  2. What if the current correction would be a 20-percent magnitude?
    In most bull markets, we have seen many times corrections of that magnitude.

    The fact that your short-term has disappointed makes my scenario very likely, what do you think?

    Thanks best

    Best

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  3. sold xiv 18.60 looking to get back in if it moves lower

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  4. You raise a good point and that is that market conditions are normalizing. People have been conditioned to a market that can't go down. We see that the market can rise and decline, and yes it is normal.

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  5. there is a possibility that we tag 1835 on the spx if we do i will buy back xiv

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  6. SC, what's your target on XIV and SPX for the lower low in Feb?

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    Replies
    1. Prices can grind up for another week or so, then around Feb 1 may see another test of $16 for XIV and 1800 for SPX.

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    2. Do you still see XIV $22 by next week? Thanks!

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    3. Blue line resistance is at $22. Red line resistance is also in that area.

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  7. Dead cat bounce, short covering, one more leg is almost certain in the picture. As long oil is not capitulated. A lot investors including me ;-), just enter in the first stage - denial

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  8. The market declined precisly into my 20-26 timeframe. The cycles that defined this low are not the typical short term cycles most traders are looking at. The only question is how strong will the bounce be. We might see one of the strongest bounces of the year. Be prepared.

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  9. so to be clear, SC, the next cycle turn date is Feb 1 and a market high, then market will go down and retest the low??

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    1. Not quite, I am expecting a high late this week, and the Cycle shows a low Feb 1st, expecting a retest of the low, then high Feb 7th, likely higher high than this week.

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    2. Basically I am expcting a retest of the low next week, then the Cycle points higher to Feb 7th.

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    3. As expected a slow grind up for the market...

      SCJanuary 20, 2016 at 8:13 PM

      "Sideways and a slow grind up next likely into end of January."

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    4. Are you still seeing a big pullback around Feb 1 for the retest? doubt we see XIV in the $16s again

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    5. Yes, pullback during next week looks likely.

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  10. XIV will be in the 13s, 14s....in the not so distant future.

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    Replies
    1. the 1910spx volume hole is a lid on bulls until they gap it....what do you consider not so distant future=today

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  11. SPX got rejected at 38.2%, SC, do you see a lower low or higher low on SPX next week?

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    Replies
    1. Market making a dip today, but still pointing higher next 2 to 4 days to SPX 1930 or so. Then dip to form higher low next week around SPX 1830, and run up to Feb 8th SPX 1950 area.

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    2. SC, do you think SPX will be range bound in FEB, i.e 1800-1950? thx

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  12. VIX

    http://mymarketgeometry.com/

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  13. Just wondering if there is a quick UVXY trade early next week and at which level?

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    Replies
    1. I'd be interested in UVXY around $35 for a pop to $52 next week.

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    2. SC, you still see SPX 1930 before turning lower to 1830?

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    3. Yes same levels, charts are still pointing up for a few more days, but the Cycle shows a low coming next week. I am expecting a surprise "scary" plunge one day next week.

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  14. nice call SC, may even see SPX 1930 today

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  15. SC, with SPX getting close to your target, do you think high is today or still little higher next week?

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    Replies
    1. It can drift higher for a few days, but a Cycle low is due, and so I wouldn't count on updside at this point.

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  16. Hi SC
    lets try to catch the surprise "scary" plunge this time ?
    would Monday or Wednesday be a target day you think ?

    Thanks for all your hard work and analysis.

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    Replies
    1. A Cycle low is due for SPX. I'm not sure which day it'll happen, but it'll happen out of the blue with no warning.

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  17. Wow, what a day of trading, SPX already at 1940!! Let's see what next week brings, 1950-1970 possible now., perhaps after some back and fill.

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  18. XIV not really poping since 1pm while SPX keep making new highs for the day, otherwise UVXY should be much closer to $35. Do you still see UVXY for $35 next week?

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    Replies
    1. Agree, XIV was weak, and it's not a good sign for the market. UVXY is getting close to that area, though could drift lower for a few days.

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