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Thursday, February 1, 2018

XIV - Decline has Commenced - Update

XIV plunged and came close to the initial downside target, and has bounced back to the orange trendline. 

Notice that XIV bounced at the blue trendline from August.  XIV is extremely weak and the blue trendline will not hold.   

The orange line may provide resistance or XIV may be able to overshoot it.  In any case the largest plunge is yet to come... 

2day Chart

















Before:


















This model shows similarity to XIV.  Notice the sudden drop with no warning, and continuation lower:
















155 comments:

  1. XIV looks to be forming the second red candle in the model on the decline. That means there may be a lower low for XIV next week.

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  2. So we may see a washout low next week to complete the first leg down.

    A dose of panic...

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  3. VIX has clear breakout on daily. Working on breakout on weekly.

    Golden cross is imminent.

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  4. Can you please update the chart with current date? Chart you have shown are from Jan 8th..Thank you

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    Replies
    1. The top chart is current.

      The second chart is a before chart. Sorry I usually make that clear that the before chart is from January 9th analysis.

      This way the readers can see the before and after. The results.

      Delete
  5. Don't you think if we get washout next week then XIV may reach in 90's?

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    Replies
    1. Let's see but on the initial decline it'll be tough to get under $105 to $110.

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    2. SC do you have any targets for SPX on this first leg down?

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    3. I'll review short term targets. Thanks.

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    4. 2685-2735? Seems like it would be in line with a drop to XIV. Would like your thinking as well SC...

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  6. Classic $10 was line on the sand resistance for UVXY. Once broken resistance becomes support.

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  7. There's the acceleration down for SPX to catch up on the downside.

    SCJanuary 30, 2018 at 10:25 AM

    "XIV has been leading down for a few weeks already.

    So now SPX and Dow should accelerate down to catch up."

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  8. That Voodoo Majik of Dr Bradley's Dates continues...Coincidence? Hmmmm...
    Next up is 20 Feb. Will it lead to a significant low, perhaps for R2K? Something to ponder for sure...until then, Be Careful!

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  9. Big Morning Star pattern on the vix on a daily chart

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  10. Louis, GBTC may see $8 with bounce to $13. I'm watching.

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  11. Replies
    1. RIOT $6 bounce to $12 though it's very speculative. GTBC at least is a pure play on bitcoin though it trades at a premium which is an issue to keep in mind.

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  12. there is a possibility that this is a short term bottom up to 2840 then down again your thoughts

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    Replies
    1. Possible - don't think so Louis..interest rates blowing out...could crash monday even with NYMO very oversold

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  13. Still lower for SPX and also make a lower low for XIV.

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  14. Daily XIV not even oversold yet haha.

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  15. Still at the top. No bottom in sight.

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    Replies
    1. Still 1 to 2 weeks down...to complete the first leg down.

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    2. are you expecting zigzag down or straight down

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  16. Bottomless!!! Lol!

    SCJanuary 26, 2018 at 8:03 AM

    "Massive selloff coming. Yes, it may be choppy and shallow to start with, but it will plunge deeper and deeper. Bottomless..."

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  17. Orange midfork UVXY resistance is at $17.

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  18. Replies
    1. It looks possible, and this is just the first leg up.

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  19. I think the SPX will bounce up after his 2768

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  20. She might have 2729 if it breaks that

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  21. Dow down 500 plus. Still just forming the second bar in the model. 17 bars total.

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    Replies
    1. 17 bars total in the decline to hit bottom.

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    2. SC - we should finish the first phase of the decline next week and then begin the rally to test the January highs?

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    3. Most of the first leg down should be complete next week but I think it may still be 2 weeks.

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  22. SC, will you be selling at the end of the first leg down or will you just hold?

    This is fun!

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    Replies
    1. I'll probably sell.

      Glad you are enjoying the acceleration phase haha!

      Delete
    2. Dow down 600. 2,400 more to go.

      SCJanuary 30, 2018 at 10:15 AM

      "3,000 more to go."

      SCJanuary 30, 2018 at 10:13 AM

      "Dow plunges 400 points on track for biggest points drop since June 2016."

      Delete
    3. Great calls SC! How many more Dow points do you expect on this leg next week? We just hit 112s on XIV so getting close!

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  23. XIV $112 has been tested but still not even oversold on daily!

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  24. Stockboom you may be right!

    $95 XIV could be possible on the first leg. $66 on the second leg down. Or even $50??? The second leg is the big one.

    It's still not oversold...

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    Replies
    1. We could gap down large on Monday...possibly for final capitulation on the first leg down

      Delete
  25. We hit an air pocket. Nothing but air under this market.

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  26. DOW closes down 666...Coincidence? Hmmmm...
    Between Bradley's VooDoo, and Satan's interventions...Be Careful!

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  27. SC, is the SPX 2017 Top Detailed Model still good? still 2350 for the purple and what would be the target for the brown arrow?

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    Replies
    1. Yes, it's valid. Still the same. SPX will lose the whole move from 2016. 1,800's.

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    2. 1800 will be the second dip correct

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  28. SC - UVXY has reached your target of 14 on Friday. Previously you mentioned support around 2725 SPX..are you going to be looking to take profits Mon/Tues if we get a little lower? Seems like we will at least get a deadcat bounce soon with NYMO extremely oversold.

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  29. No bounce this week. The daily XIV will have to become extremely oversold before a bounce can materialize. It'll take a week or more to accomplish that.

    In this situation coming off the grossly overbought condition, the indicators will just continue to become more and more oversold.

    $97 XIV is coming soon.

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    Replies
    1. SC, how far up after the bounce, $130? And would you go long XIV? Thx

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    2. Yes, I might be interested in XIV.

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  30. What we should expect this week is a steady grind lower. Not fast. Just steady down.

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  31. 2713-2723, bounce to 2767. Pullback. Bounce to 2790-2807.

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  32. XIV small bounce at $100 and down to $97.

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    Replies
    1. XIV hit $95! Do you think more downside here?

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  33. Bottomless or Bounce? Hmmmm...now that's something worth pondering. Here's a guess...because that's really all anyone can do...but in Bradley VooDoo terms, perhaps we'll see some sideways churn leading to an Olympic Style OpEx Bounce into 20 Feb, followed by a Spring Break Style Bottomless drop into 21 March? Always in motion the future is...and no one REALLY knows...so, Be Careful!

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  34. SCJanuary 30, 2018 at 8:10 AM
    Thank you! XIV $105 to $130 and down to $80.

    This is going to be an exciting year!! Unprecedented moves in volatility...

    is this still your valid opinion 105 to 130 then down to 80

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  35. VXV:VIX, complete on downside. Be very careful shorting near S&P 50 day. If NYMO closes below -90, near term carnage is to the upside actually.

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  36. COVERED XIV SHORT 107 MADE 32 POINTS

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  37. CONGRATS TO SC ON HIS MASSIVE TIMING

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  38. Yes its bottomless, but no grind lower here :) ... does it change anything in your scenario SC ?

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  39. And 'bottomless' it is! Be Careful...

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  40. xiv is 68 right now holy crap covered 2 soon

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  41. XIV at 40 afterhours!! HOLY MOLY SC!!

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  42. XIV < 20...according to zerohedge will be terminated!!!

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    Replies
    1. Congrats on your win!

      I have to admit I don't understand the afterhours XIV price action. XIV is based on vol futures not VIX and there was no futures action that would justify that pricing.

      Delete
  43. Anyone see XIV trading at $24 afterhours down 75%

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  44. I understand that a "termination event" could be triggered based on VIX futures going up by 80%. This was an unlikely scenario but was theoretically possible. And now it has happened unfortunately. Well know more tomorrow morning. I wonder what effect this would have on Canadian ETF HVI.TO which is similar to XIV but does not have termination event in its prospectus.

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    Replies
    1. I'm afraid the inverse Vol trade is probably over given the after hours action in VIX futures. Lots of ppl losing their shirts on XIV/SVXY.

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  45. bottomless best call of century no joke

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  46. A Canadian Tech Analyst calling for possible S&P 2500
    https://www.bnn.ca/market-call-tonight/keith-richards-market-outlook~1319765

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  47. Interesting. The problem with XIV is that it is forced to rebalance daily. It can handle rebalancing over multiple days, but not a big move in 1 day.

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  48. VIX is testing the 40 to 50 level of spikes in recent years, but the concern is that the next level above that is in the 70's.

    I'll post that chart.

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  49. SC, why did not you sell XIV?

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  50. UVXY melted up through the orange midfork. Next resistance is in the low $30's at the upper orange fork resistance. See the UVXY chart posted in January.

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  51. Doubt much downside left short term though with UVXY nearing resistance. So will be taking profit soon.

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  52. Will xiv ever be a buy or is that investment toast and how long will Vic stay up for 1 week your thoughts

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    Replies
    1. I'm not sure if XIV has any value now. It depends on what time today the fund manager was forced to rebalance.

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  53. VIX may see a little higher. SPX choppy a little lower but most of this leg is done in my opinion.

    My feeling is there will be another large leg down but not now.

    Many charts coming...

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  54. I'll wait for clarity on XIV. If we need a different vehicle then that is just fine.

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  55. Both XIV and SVXY are halted. It seems that they have lost the majority of their capital with a failed structure.

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    Replies
    1. Net asset value listed at $4.22 for XIV yesterday according to Velocityshares.

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  56. UVXY near the orange target in pre market trading.

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  57. Can uvxy get halted like xiv and xiv

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  58. Planning to take profit on most of my UVXY position this morning at the open.

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  59. Great call on the capitulation Rob!!!

    RobFebruary 2, 2018 at 12:36 PM

    "We could gap down large on Monday...possibly for final capitulation on the first leg down"

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  60. How do we play uvxy to the downside if XIV is not there anymore do we short VXX because they do not allow you to Short uvxy

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  61. I'll exit most of the position in UVXY. The only other potential level to watch that I have identified is UVXY $70. Maybe I'll keep a little for that.

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  62. Also what about the people that are short xiv from 130 and the puts

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    Replies
    1. Bloomberg has an article out. No decision has been made yet. The fund manager is considering redeeming the notes. The accountants will sort it out with time. Possibly pay out the $4.22 in cash.

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    2. That happens uvxy to go to 65 $70

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  63. I'm going to bank profit on two thirds of the UVXY position. Hold one third.

    I still don't see a bottom but don't think much downside is left. Probably see markets grind a little lower short term.

    Eventually expect a snap bounce, and so best to start being cautious.

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    Replies
    1. UVXY setting to open around the orange fork target resistance.

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  64. Sold two thirds UVXY at $30.

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  65. Is there anything out there to play a bounce? No XIV, HVI.TO halted

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    Replies
    1. All the inverse volatility etfs have collapsed.

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  66. Sold the remaining one third UVXY at $25. Completely out.

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    Replies
    1. Would it be smart to short uvxy here

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    2. And how long you think uvxy to go this week your thoughts

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    3. UVXY rejected hard this morning off the orange resistance. Chart is coming.

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    4. It's not clear what is next for UVXY. Possibly it could still test $30's. I feel SPX is working closer to a low. I wouldn't short volatility yet. Let's just wait.

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  67. I'll wait for volatility to settle down. I'm looking at S&P and other markets as well.

    For now though I am just going to enjoy the profit.

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    Replies
    1. Thank you for keeping me in line however I have a friend that is in a covered call on this he bought the stock at $9 and he gave them the right to take it away at 13 he's been trying to buy back the option but the spreads are not worth it so he's trying to hedge the position to protect the gain
      that's in the account on the uvxy any recommendations

      Delete
  68. Svxy seems to be the last inverse etf. Back trading.

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  69. Thank you SC! That was quite the ride.

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  70. It's been a long week and its only Tuesday!

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  71. XIV is trading at $5. It'll delist February 20th.

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  72. but how is that possible ? what made it go down 90%

    similiar to SVXY HVI ?

    Please share your thoughts and ideas thanks SC

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  73. Is ETF trades of finished in my opinion doesn't make sense that uvxy is coming down svxy is in the basement and XIV is getting the delisted
    tells me there's a problem

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  74. SC, since we don't have any inverse ETFs to track anymore lol. Are we expecting say 2800 for the bounce into march and then sink back to 2400s in SPX?

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    Replies
    1. You have the right idea. The first leg down is finishing. We are about to enter a period of whipsaws. The second leg down is larger and follows the whipsaw period.

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    2. Ok I will wait for sometime to short again then...doesn't seem prudent with all this whipsawing volatility. Approximately how many weeks of whipsaw do you think we'll have according to the model prior to the beginning of the second leg down?

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    3. Charts coming to explain...

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  75. Lots of people got screwed by XIV (Credit Suisse)

    "XIV Trader Loses $4 Million And 3 Years Of Work: Here Is His Story" (zerohedge)

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  76. the spy recovered make no mistake about it we will see mid 270s then when all said and done 220 area

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  77. Agreed Louis!

    ETF actions of late make no sense.

    Someone explain how TVIX moved 900% (14-$120) in 2011 with VIX no higher than 40, yet UVXY cannot reach 1/2 that on a panic VIX to 50+?

    XIV is a disaster and I predict lawsuits forthcoming since Credit Suisse claims "no material impact"....$$3.8 B loss ...so who lost their shirts then? Have no position in any short vol products. Disappointed at dismal long vol performance.

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    Replies
    1. There is a bigger splash coming for long vol.

      It still makes sense. UVXY tested close to the weekly 50ma and so it plummeted today.

      Remember in 2011 the move started slowly. The bigger moves come later. It has to warm up first.

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  78. Not much will happen the rest of this week, relatively.

    UVXY chart is coming to show the next moves.

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    Replies
    1. how far down do you think uvxy will go this month
      i shorted it

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    2. $9 or $10 next week UVXY.

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    3. SC do you think shorting SPX around 2750 is a good idea for the next leg down?

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    4. Not yet. Wait for next Friday.

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  79. Is svxy dead here or would you buy this thing

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    Replies
    1. The inverse volatilty etfs are not trading properly. Some have suspended the creation of new units. If units have been suspended then the etf no longer tracks vix futures. Complete gamble so I won't touch them until The problems are sorted out.

      Delete
    2. im wondering if there is anything else to trade
      are you looking at anything else or are you going to still trade volatility

      Delete
  80. UVXY should close this week a few dollars higher. $18 give or take. Then next week fall to $9 by Friday. So next Friday is when I would be looking to short and enter UVXY.

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  81. Just made a day trade lol. In UVXY at $15.45 and out at $15.85.

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  82. awesome you must be buying major volume to trade and make .40 a share ? :-)
    great stuff SC

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    Replies
    1. Another profit for the bag! Love this etf lol.

      Delete
  83. Good job it's easy to make money when you got big wins behind you LOL by the way I got to commend you on that move on uvxy I did not expect it to hit $35 I thought that was going to be the second leg

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  84. Yep, i was right. Here come the lawsuits...

    https://www.girardgibbs.com/velocityshares-daily-inverse-vix-short-term-etn-lawsuit-investigation/?utm_campaign=velocityshares&utm_medium=ppc&utm_keyword=%24xiv&gclid=EAIaIQobChMIhJmY0KCU2QIVzWV-Ch1dzA3_EAAYASAAEgKLuvD_BwE

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  85. New chart update has been posted!

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