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Friday, October 6, 2017

XIV - Parabolic Trump Trade Coming to an End!!

As predicted by the model, XIV went parabolic this year.  Price has achieved the minimum parabolic target, and is reaching into overthrow territory. 

The "Trump trade" is coming to it's end.

It is early, and the overthrow will take time to play out.  The parabola, of course, will end very badly.  Complacency is extreme, and that is foretelling of a massive drop ahead during the next 1 year timeframe.

Long term support for XIV is at $30.

4day Chart
 
Before:

March 3, 2017:

"The movement in volatility is unprecedented.  XIV has broken above channel resistance, and is configuring into a parabolic melt up. 

Complacency is going parabolic which ultimately is extremely bearish for the S&P 500."


3day Chart
















Parabolic XIV 2017 Model:
















74 comments:

  1. SPX is overbought for the first time this year.

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  2. Turn date was hit yesterday October 5th.

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  3. Next turn dates October 18th and October 31st.

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  4. So what u expext on oct 18 and 32

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  5. Is October 5th a top and October 18th and 31st a top as well or are they bottoms

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  6. I'm short term bearish. I consider this a retest of the July high, and XIV is still showing relative weakness.

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  7. SC, What do you mean by the turn date 5th, 18th & 31st.. is it in terms of SPX moving down or up? Is it possible to show UVXY range during these dates?

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    1. The turn dates are dates to watch for turning points. They can be either highs or lows.

      We are seeing some weakness today following the Oct 5th turn date. My feeling is if it hasn't turned down already then watch for a turn down Oct 18th.

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  8. It is early to short long term, and I remain open to short term trades that are advantageous in coming months. Still, it is important to recognize just how extremely high prices have become.

    Complacency is literally off the charts.

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  9. Don't be an Isaac Newton hahaha!!!

    "Back in the spring of 1720, Sir Isaac Newton owned shares in the South Sea Company, the hottest stock in England. Sensing that the market was getting out of hand, the great physicist muttered that he 'could calculate the motions of the heavenly bodies, but not the madness of the people.' Newton dumped his South Sea shares, pocketing a 100% profit totaling £7,000. But just months later, swept up in the wild enthusiasm of the market, Newton jumped back in at a much higher price — and lost £20,000 (or more than $3 million in [2002-2003's] money. For the rest of his life, he forbade anyone to speak the words 'South Sea' in his presence."

    http://www.businessinsider.com/isaac-newton-lost-a-fortune-on-englands-hottest-stock-2016-1

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  10. I will have short term charts coming as well. I am trading into the ultimate setup for UVXY...

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    1. Thanks for the update! Do you still have 2460 as the downside target, or has that evolved because of the overthrow on the upside?

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    2. Yes, still the same. Thank you!

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  11. S&P 2508 to hold rest of year. Easy, without a doubt. UVXY is to be shorted, only. Do not go long UVXY. Do not.

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    1. Be careful, I'm bullish into year end, but am not sure that level holds on next pullback. What gives you such confidence?

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  12. I want to see there's a possibility that by the end of October we could see 2460 all the SPX

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  13. SC,

    Are you still holding UVXY from 21.85?

    Will you exit at a loss or sill expecting $25?

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    1. A short term chart will be published for XIV soon. The chart is showing sideways first for XIV. However, support is at $86 for XIV, and that support is to be tested this year.

      So while I expect UVXY to grind slightly lower, I will hold and continue to accumulate UVXY, and will look to exit on the pop.

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    2. How old do you think uvxy could go from here on the pop how high in the short-term your thoughts

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  14. SC, that means you do not expect UVXY to be at $25.00 max by the end of this month.. Is that you feel or may be? Cause bulls in control still .. might see a pop, but not huge due to time decay!

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  15. 19.49 stop out from 19.56 entry, it is too close to current month expiration, and it seems there is one more leg to run to reach 2,460 ~ 2,470, stay put and look for re-entry. The market is way too strong.

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    1. Yes, 2,560 ~ 2,570. sorry for the Typo and timing could be 18th as the front month will drop out, then we can really leverage remaining Oct to ride UVXY to possible 25, or 40 for the explosiveness. The correction will be swift and violent, but do not fall in love of downside until 2017 is done.

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    2. what will be your rentry on uvxy

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    3. People tend to focus on the price, but... My timing is around 18th, when front month is gone, and month2 and month3 contango are very reasonable at 5.6% and reasonable position at 12.1 and 12.78 respectfully. Unless SPX went banana, I will not get in until 18th. The entry point is not matter of price, but month 1, 2, 3 price and VIX spot. So not to focus on UVXY price, but those factors. VIX is not stock, no fixed price, it is simple put call ratio, and its movement is very irrational, so you will lose big and gain a lot. I guess everyone here had that painful and joyous moment. It is roughly 40 out of 220 trading days for UVXY to pop in past most hated four years. So timing and calculated risk management are the keys. No guru here, just a sorry ass were burned zillion times on UVXY and want to share with everyone. However, the widow maker sometime can make you super rich, whether you can wait until then, is a different story. In general picking top and bottom is very painful.

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  16. Short term the chart for SPX looks negative, while the chart for XIV looks sideways. SPX is a good short!

    Nothing major will happen this month. XIV will fall hard in November/December but sideways first.

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  17. It is true the decay will weigh on UVXY with sideways ahead, but it looks good to accumulate in October and November.

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  18. uvxy turning out to be a big freakin turd

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  19. SC, I think the early entry point didn’t turn out to be correct.. most probably another turning date doesn’t seem to be before 18th.. The decay will weigh on UVXY.. would need more to average out.. That’s why UVXY is called a beast...Timing is very everything. Your thoughts?

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    1. I've identified a 1 year target for UVXY. I will be posting that as the parabola matures along with the detailed math involved. The tvix taught important lessons in 2011 when it jumped 700%.

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    2. It's okay if it moves up but the question is how far down is this thing going to go if it's going to go to 14 that I'm going to dump it and buy it back what are your thoughts on how low this thing could go and I know it's not a guarantee just curious your thoughts

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  20. UVXY can see slightly lower on a capitulation. 60% seems reasonable and possible. Keep in mind it was trading in the equivalent of 6,000's in 2016. So it's all relative. It's not about the short term, but the big picture as shown in the chart.

    A big move in the market cannot be caught with a day trade.

    So let the UVXY fall. Great! Upside already looks attractive longer term. I'm a buyer as it declines and plenty of patience.

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    1. its great to have patience and i respect the way you trade you are profitable however what would be a good price to average you would average your thoughts

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    2. Louis, don't you need to worry about another reverse split, as well, if UVXY gets too low?

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    3. This is a parabola after all. UVXY is cheap already, but we can see ridiculously cheap potentially. I think we could see under $10 and maybe with some luck could even have a chance under $5!

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    4. If we see silly prices I'll get very aggressive.

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    5. There is no silly price, but low risk entry. But as far as UVXY, anytime is a risky time, take a look of the chart in past four years. Towards to zero is by design, but... Your putting money on the table game in Casino had similar expectation too...right. You do the maths. meanwhile I am "trading" this window maker everyone day, but be very nimble.

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  21. The SPX made an xyz bull flag today suggesting higher prices into Monday, which should also be a low. I expect 2560 by Monday then a quick test of 2536 the same day to cover the recent gap up. Monday is TD 15 off of a 24 TD cycle low. We had similar moves in early June and again in late July. All shorts should cover at 2536 and go long as another new high should result.

    All momentum indicators are rolling over suggesting after the next high after Monday we should see some downward selling. Friday could gap up.

    GDX should see some selling early Friday followed by strength.
    Courtesy from brad gungeon
    Bluestarmarket timer

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  22. 4.5 million "invested" in UVXY at inception (six years ago) would be about 17 dollars today.

    There are nothing but silly prices and they mean nothing.No matter how low it goes it can and will go lower.

    Holding UVXY for more than a day or two is usually disastrous; while trying to time it's spikes involves predicting the future, which is impossible to accomplish with consistency.
    It is a leveraged derivative of a derivative of a mathematical construct. One would do as well to consult tealeaves as to consult price action of UVXY.

    All my humble opinion of course.

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    1. It is speculator's slot or slaughter machine if you would have to ask why. No one can deny the fact showing on the chart but still 30 million share traded everyday. I love its vitality!

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  23. SC,

    If you are anticipating UVXY $5-10 why on earth would you enter @ $21 and hold/add?

    Not following your logic...

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    1. His logic makes sense to him he came Upon a lot of winners just remember the last 19 Point winner 76 295 that's 19 points so he could hold it down Five Points and add to that position everybody's risk tolerance is different

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    2. Would be better to exit $17 (take the loss) & reenter $5-10, no?

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    3. While it is likely to see lower in the months ahead, it still may pop short term, and is already attractive at this price looking into 2018.

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  24. 20% loss on capital management is not prudent; the maths is that you have to expect 25% growth to make up your original 20% loss... But VIX is such strange animal and go from 9 to 13 at no time, and it is not stock, but put call ratio. So everything is possible. Put your emotion out and put your stop in. It is easy to say and hard to do. Most of time I did is that I lick the profit and sustained large loss because I exit too fast and average down until I cannot watch my portfolio. I guess everyone had similar experience. SC is pretty calm, but we cannot deny he sustained few extraordinary loss in the past just from price stand point. Of course I have no idea of his assets allocation. It might be peanut of his entire portfolio. in any case, Let's make some money, UVXY or VIX. Set to re-entry to 15.90 ~ 16.15

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  25. There was decent SPY 'buying on weakness' at S&P 2548. Perhaps some ping pong between 2570s and 2525 in future. Beware the 10yr yield will get to 3% - which means banks stocks should go up. VXV is coming down to that 11.8-11.9 level again. Interesting.

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  26. It will never hit 5, they always split it around 8. It has lost 1/2 of the last split making it, in before-split terms, around 4 right now.

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    1. Normally that is true, but it could happen briefly on a capitulation event.

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  27. UVXY. enter only when market is up and it does no fo down. Thats rock bittom price

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  28. in for 16.12, not 2,560 yet, but close.

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  29. Market up, VIX up, one of those weird trading days!

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    1. Interesting that VIX is above the July level.

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  30. SC, do you still expect to have the same turn date..18th Oct..?

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    1. It's too early for a major turn, but may see a minor.

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    2. I think you are saying that the drop to 2460 could start from here / today, but that it isn't likely to be a long-term market top today. Am I interpreting you correctly?

      Thanks...

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    3. SPX and XIV are in the early stage of forming important tops. The models show tops forming over several months.


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  31. Today is a turn date. However the tops will take time to form.

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  32. I'll wait and continue to build a position. We are reaching into the optimal time to short. The vertical phase of the parabola.

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  33. Out on 17.69 early morning. Woke up at right time, This dead cat will bounce little while until it dies.
    Wait for next entry, or swing to VIX

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  34. SC, you were going to post a short term chart for trading setup of UVXY?

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  35. SPX weak. SPX looks like it has rolled over.

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  36. XIV is holding a little better relative to SPX, but that's only because it fell harder in August. It may grind sideways and a little higher before it pulls back. May see a pullback around $120.

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  37. If there is a worthwhile move short term I'll take advantage, but the big picture is that XIV is forming a peak over several months.

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  38. Sc do you mean 102 on xiv pull back?

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    1. Cycles are down but I'm not expecting much to happen yet. The momentum for XIV will need to slowly diminish before much pullback. The chart for SPX looks weaker.

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  39. SC, do you still anticipate UVXY to be at $25-$30 range in November 2017...????

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    1. No, I don't see anything major happening right now. The big picture looks great for UVXY, but not expecting much short term.

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  40. In 15,20, out of 16.29, the SPX is way too strong and has a lot tail wind. The best is to trade it now. Until the down trend is firm, do not fall in love of the downside. Will SPX collapse, you bet, when? Before you broke

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  41. SPX key reversal yesterday. The run for SPX is over.

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