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Saturday, October 5, 2019

SPX - In VIX We Trust

SPX has a clear Double Top which completed this September.  

The top is in.  Last week the trendline was broken to the downside.  SPX will soon resume the downtrend which is already in place.  

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VIX has been trending higher for years.  Starting in August the VIX trend began to accelerate to the upside.

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VIX continues to trend higher to break the 1987 trendline which has already been previously tested.

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SVXY has been leading lower for more than 1 year to date.  The recent failure of SVXY to test the July peak was the "tell" that SPX had, in fact, topped.

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75 comments:

  1. I do not believe in miracles.

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  2. VIX, you are free, run like the wind...

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    1. Great call last week Louis! Sorry about that whipsaw, you had the right idea!!

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    2. No worries I made money with it

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    3. Shorting volatility was great to uvxy 90 to 23 sick move td ameritrade let's you short uvxy if you go into hard to borrow program and over 100k value

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  3. Sc r u holding uvxy from 30. If market falls will gold go up

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  4. Sc so when spx 2635. What will be vix. And uvxy?

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  5. 2,635 SPX target for first half next year. I only show 2,780 SPX on this chart as an initial downside target.

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    1. Hi SC, thank you for update. I believe spx will whipsaw for a bit and eventually go for your target of 3050-3080. Cannot pin point yet as I dont have a break out point yet. All the best.

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    2. Forgot to mention, VIX target is 12.5

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    3. Thank you. Sounds good. That would be fine by me. Keep us posted on further developments. All the best as well!

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  6. SPX closed at 2,952. It is dropping to 2,635 target due first half next year.

    VIX will retest 35 at that time which is the December 2018 high.

    UVXY is $26.45 and doubles to $50.

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  7. Thanks. In this run of spx. How much higher. 2960 to2980

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  8. There is one positive I see for SVXY. It held the 50 weekly at $51 as support. Unfortunately though for SVXY it'll have a death cross on the daily in about a week's time.

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  9. Low first half of 2020..? I thot it will be high first half of 2020?

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  10. sc so what your saying is you think we drop to 2780 and thats where
    you will exit?

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  11. 2910 is the next bottom. Bank earnings start Oct 15. White House will unwind tariffs, inevitably. FOMC rate cut, Oct 30.

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  12. Bank earnings will be horrible.The White house will not unwind the tariffs.And everyone already knows the rate cut will be .25 already baked in so a non event.

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  13. I mean this go around not next year?

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  14. UVXY has broken out above the white trendline on the UVXY chart.

    However, UVXY may find some resistance at this level today. I say this because SVXY tested the weekly 50 at $51.23 this morning.

    Remember we were looking for a low today on SPX with bounce into Friday.

    SPX may bounce for a couple days here. I continue to think that SPX is heading lower and that the next low is likely on October 14th or 15th which is when the next round of tariffs take effect.

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  15. yes i sold today at top lookin to buy back

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  16. SPX has dropped and is testing the white trendline this morning. I think today's gap down will likely be filled by Friday.

    Next week, SPX will break the low of last Thursday.

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  17. UVXY has the red resistance overhead at around $29.60. If it cools later this week it can fill it's gap and also backtest the white trendline at about $27.

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    1. my orders in to buy at 27.25 big block

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    2. i bought some at 28 on that dip not that much only 10000 shares

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  18. Reality starting to sink in that there is no Goldilocks market. More like the Joker. HAHAHA

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  19. Market waited till the last minute, but dropped like a rock.
    Thanks for the great call SC!

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  20. I was just looking at your 3rd chart. You have the VIX going to $60 next year. Is that correct? $60 on the VIX would be HUGE!

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  21. bought uvxy at 27.76 and tvix at 14.60

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  22. SC .. where do you see bitcoin going in the next year?

    Thanks

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    1. There will be a decision made by Monday regarding Bitcoin etf. If it is approved, GBTC will fall by arbitrage approximately 23%.

      I'm watching.

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  23. bought tvix at 14.30 and uvxy at 27.30

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  24. This looks like even my bearish to me now!!!

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  25. bought tvix at 14.09 and uvxy at 26.97

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  26. I got an obscene amount UV XY and TVIX

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  27. Possibly an immediate S&P 3003 in next two sessions. Earnings will be ok, yet again. VIX about 14.86 - 15.15

    "Be Careful October 10, 2019 at 7:09 AM
    S&P 2995, then 3017 soon."

    "Be Careful October 7, 2019 at 7:46 AM
    2910 is the next bottom. Bank earnings start Oct 15. White House will unwind tariffs, inevitably. FOMC rate cut, Oct 30."

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  28. long uvxy 24.90 tvix 12.75 nice average

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  29. you might hit 3000 when they find out the deal is not as big as it should be look out below!

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  30. this market full of crap when its low they say things are wrong when its up things are great we might see 3000 to 3024 after that i am looking for 150 points down spx

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  31. SC where we r now. Temporary truce on trade war

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  32. Usually about the time when everyone is bullish for a nice snack down

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  33. I dont think ViX will go below 14.5 Prob a great buy opp

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    Replies
    1. VIX very solid. Yes, VIX building support around the 200 weekly which is 14.70.

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  34. SVXY will decline as projected. The SVXY chart hasn't improved, and it will experience the death cross in two days. This bounce has done nothing to improve the situation.

    Having said that I'm looking at a model that suggests SVXY can retest the $56 high by October 22nd. The model shows it falling 11 days straight afterwards and continues lower until November 19th.

    UVXY pop for a couple days because of the SVXY death cross. I expect $20 or $21 in another week though October 22nd. It'll spike after that for a month into November 19th.

    I may do a little hedging here. I'm looking at VXX Oct 25 $21.50 puts which I may enter on Monday or Tuesday. My plan is to increase UVXY position aggressively in about a week time as SVXY tests $56, and get ready for the large runup for UVXY into November.

    VIX is strong. It has golden crosses both on daily and weekly charts. We are going to see volatility in this environment.

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  35. How high do you expect uvxy to go before
    21.50 and what price in nov?

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    1. No, the 21.50 is for VXX.

      UVXY pop into $25's Monday/Tuesday. I expect it to come down to $20 or $21 Oct 22nd.

      The model I am using shows the next high for UVXY November 19th. Expect UVXY to hit the 50 weekly in November which is currently $41.95. The 50 weekly is declining though so by November 19th it'll be lower, probably close to $38. Interestingly the same number we have talked about for a while.

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  36. I was thinking oct 22 as a low you are thinking a high?

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  37. Same negative siutation for SPX.

    From October 22nd SPX to drop for 11 days straight and continue lower to November 19th.

    The market will have little patience for this "deal".

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    Replies
    1. SPX to rise for a week then down for a monthh.

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  38. So you are expecting TVIX to go to $10 UV XY to go to 2021 correct

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  39. So you are looking for an approximately $1 bounce in UVXY to $25.XX on Monday/Tuesday? Currently at 24.65

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    1. Yes, death cross is imminent, probably happen on Tuesday for SVXY this week. That should lead to a small pop in UVXY Monday/Tuesday.

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  40. Sc do u think spx will make new high or it will be 3020 again Also the china delegation will discuss hard lines who will agree to nothing probably. So it will come down to 2750 or so

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    1. It's possible to see SPX testing the high, but it is topping. It's not a bear market yet, but SPX is heading lower for 4 to 6 months.

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  41. SC, are you looking for a new SPX ATH in this process. Notice the divergence from SVXY last few SPX tops. https://imgur.com/a/g9VBJe1

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    1. Yes!!! Thank you so much for posting this comparison! We've talked about the comparison; this chart is a great visual.
      This is most important.

      Remember, the character of the market changed in February 2018. SVXY/XIV went parabolic and then collapsed. Said another way complacency went parabolic and collapsed. The drop continues. SVXY started to accelerate lower in August compared to SPX.

      SVXY is the canary in the coal mine. Despite this fact traders are watching the SPX chart. Sure, SPX can make marginal higher highs, but is looking more and more exhausted.

      The gigantic loss in SVXY occured in 2018 and nobody is watching this chart. They cannot see what is happening.

      SVXY is going lower than most can imagine. VIX sky high. This is a volatility event and it's going to end with a bang!

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