Sunday, April 6, 2025
VIX - Retest of August 2024 Highs Coming
VIX has been in an expanding pattern and once it broke out, SPX plunged 20% to start. Volatility started to heat up last summer and has experienced three unusual spikes since in a short period of time. Volatility is continuing to expand and that suggests lower markets are coming. SVXY is breaking down from the uptrend and heading lower. Daily charts
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One of the clues that this turmoil was coming was that on the VIX daily chart, the 50 average is still in a golden cross from last year. So it is a highly volatile environment.
ReplyDeleteThe 10% tariffs became effective on Saturday and the larger tariffs are due to take effect April 9th. I'm expecting VIX to continue to rise and SPX down this week. The declines will moderate from what we saw last week.
ReplyDeleteI anticipate that VIX will likely take out the 65 high from last year but will not go as far as the 85 high VIX from 2020 Covid.
ReplyDeleteSPX hit my 4,920 and seesawing but it'll continue lower. I'll post the SPX chart.
ReplyDeleteSPX heading to 4,150.
"Trump threatens new 50% tariffs on China if Beijing doesn’t remove retaliatory duties"
ReplyDeleteTrump is resetting the economy! So what we are seeing now is the return of deflation and recession.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteGold selloff next to meet margin calls soon? LFG SC...holding short thanks...
ReplyDeleteTomorrow tariffs take effect so expect a down day.
ReplyDeleteYesterday markets hit my 4,920 SPX target and a snap rally occurred. The bounce will last long enough to relieve oversold conditions. Markets hoping for a deal but that hope will turn into massive selling later in the month.
ReplyDeleteFully agree with you SC. Armstrong also nailed this latest correction to the very week. He mentioned more selling towards the end of April, than the market will come roaring back due to capital fleeing Europe. Due to trouble in the middle east and Ukraine and Russia. Gold also to take a hit before springing back with vengeance in the first week of May.
DeleteThank you and I appreciate this! Yes it should get worse. We'll see more selling. Also agree the Ukraine war is about to become more active. Putin has been waiting for the moment. Countries have cut back financial support for Ukraine and Russsia will take advantage. Good point!
DeleteWe have here a 300 point pop from my 4,920!
ReplyDeleteInteresting that Hong Kong had worst day since 1987 and China the worst since 2008...
ReplyDeleteTariffs become effective tomorrow. UVXY up again and rising much higher.
ReplyDeleteMy preference here is to chart SVXY rather than UVXY directly. I've been charting it for a while. UVXY I'll look at the numbers more but should at least double short term and much higher than that this year. The biggest volatility is still to come. It's early.
ReplyDeleteFresh high on UVXY
ReplyDeleteMarkets cooling off!
ReplyDeletehttps://youtu.be/fxDAyUiXphg?si=cuD5TqvhGces395C
This selloff isn't just about the tariffs. That was the trigger. Economic surprises are coming and they are going to be negative. There's recessionary forces and this is deflation we are seeing. The market knows this and is leading down. The economy is worse than everyone thought and the markets are heading lower.
ReplyDeleteChina tariffs 104% took effect at midnight. China slapped 84% tariffs on US goods. Huge tariffs have hit both sides ending or severely limiting trade between the two countries.
ReplyDelete"A panel of EU trade experts will vote on a set of retaliatory tariffs on the United States today."
ReplyDeleteVIX should be working up to last year's high around 65. We can see that maybe within a week.
ReplyDeleteBy Friday lol?
DeleteHahaha markets are volatile but I'll wait a while.
DeleteTLT looks like could drop to 65. Are China and other foreign creditors dumping Treasuries?
ReplyDeleteYes Rob that's what we need to watch. With 125% tariffs China will retaliate. When they sell it'll be a big shock.
DeleteTrump:
ReplyDeleteBe cool! This is a great time to buy!
Ok so Trump's looking to support the market here at the 20% down threshold. So ok I'll look to take profit soon probably this week. VIX is cooling a bit today. I'll wait for the next entry. It won't be long...
DeleteTook some profits as well. Later April should see another decline.
DeleteWe wait. VIX may pop a bit tomorrow i suspect but dust needs to settle for next big wave of volatility.
DeleteTrump raises China tariffs to 125% but announces 90-day pause for others!!!
ReplyDeleteStopped out UVXY $47.50.
ReplyDeleteWas good profit from entries at $29.40 and $19.20.
DeleteOnce Trump came out and said buy the market I wasn't going to fight that.
ReplyDeleteBut I also know the next wave of volatility will come. UVXY has a golden cross on daily. It's coming.
ReplyDeleteThe cross is coming; not quite there yet needs a little time.
Delete"Trump tariffs drop to 10% universal rate for all countries except China for 90 days"
ReplyDeleteIt was nice that Trump gave that tweet on Truth Social! A little heads up!
ReplyDeleteMy 4,920 level produced once again big rally! Look at this reaction.
ReplyDeleteDOW up 3,000!!!
DeleteSo to recap I took the first entry on UVXY $29 back in September before the Election. I knew the volatility would come. Then I said watch for volatility after Trump inauguration. I took the next entry UVXY $19 in January. That timing was optimal.
ReplyDeleteYou see I have a Cycle to watch for volatility that filters out the noise. The SPX is a noisy index. It constantly jitters and especially at the highs it oscillates and confuses traders.
Now I look at the filter and volatility should calm down for about 30 days. The next volatility I think will be the most spectacular of the entire move. So for volatility we wait.
Still holding some shorts in case market declines here in next couple weeks.
DeleteToday S&P losing much of yesterday's "historical" rally
DeleteThe volatility will calm a bit here. Relax!
ReplyDeleteThe Canadians are going to come to the rescue and help Trump. Through thick and thin always Canada is there for support. April 28th there is an Election in Canada and it could be a positive for the United States.
ReplyDeleteI'll wait until after that to reshort.
"On March 8, 2025, China’s commerce ministry announced it will apply a 100% tariff on Canadian canola oil, oil cakes and pea imports, and a 25% duty on Canadian aquatic products and pork."
DeleteYou see Americans and Canadians have something in common. Both have a problem with China. China recently put tariffs on Canada. Canada sees Trump making a stand against China and will support that. America and Canada are like two brothers who fight a little but still the best brothers.
DeleteWell, as a proud Canadian, the relationship has been damaged. Hoping the election has an outcome that strenghens our country's economy and diversifies trade so we are not so reliant on the US. What the US is doing, is hurting us a lot
DeleteNot sure if brotherhood or family does that. Unless you come from an abusive home
DeleteRelations hopefully will improve somewhat though tariffs seem likely to stay. The US is running a huge deficit and has fired the government and tariffs to raise money.
DeleteTrump will need Canada's support in the war against China.
DeleteXi says China "not afraid". China strikes back at U.S. and will raise tariffs on American goods from 84% to 125%
ReplyDelete