Next week, a decline to the 1289 to 1295 area is indicated by the symmetry. After that, a sharp bounce (lower high) is anticipated to test the upper red fork line at point 4 later in February. Point 4 to point 5 in the symmetry is the Crash #1 of 2012.
Calculated Target:
The May 2011 high was 1370, and SPX fell to the Oct low at 1074. That is a 296 point drop. The Friday, Feb 3rd high at 1345 SPX minus 296 points equals 1049 SPX.
Therefore, the calculated target for Crash #1 of 2012 is 1049 SPX.
Timing:
Compared to the 2-week late July/Aug Crash in summer of 2011, my work indicates that Crash #1 of 2012 is comparatively larger in price, but with half the velocity in time as summer 2011.
Crash #1 of 2012 is expected to take 4 weeks to plunge from late February to a bottom at the 1049 target in the last week of March.
Daily Chart
A bullish wedge pattern appears complete for TVIX as of Friday, with a minimum of $21 to maximum of $23 targeted for next week.
The TVIX target is expected with SPX declining from point 2 to point 3.
30min Chart
bold, but clear in terms of timing and price expectations for the week.
ReplyDeleteyou are expecting a 40% sp increase fof tvix? i sure hope you are right
In terms of the mathematics, there simply is no more room for the rally to advance. Therefore, the bear market resumes.
ReplyDeleteSC,
ReplyDeleteAre you currently short the S&P?
PLease advice.
Thanks
Yes, shorted SPX Friday at 1341. Also long TVIX at $14.48 with a large position.
ReplyDeleteSC, think you could be right
ReplyDeleteCHANGE IN TREND TOP
TODAY OR MONDAY 2-6
http://markethighsandlows.wordpress.com/
Not enough balls to go long tvix here. But all in cash and plan to buy tvix once future gets cheaper (backwardation).
ReplyDeleteSC, what do you see for metals since they seem to be following index and dollar?
ReplyDeleteSilver lease rates are dropping again, gold short term rates are negative as well, suggests PM's (especially silver) may correct again.
http://www.sharelynx.com/chartstemp/charts11/kitco2aglrates.php
I do see Silver and Gold pulling back short term. Yet, in coming weeks I am quite bullish for both Gold and Silver.
ReplyDeleteThose charts are coming shortly.
Another thing that could set things in motion is Israel and Iran. There's no way Israel is going to sit around while Iran builds a Nuke. If Israel does something, all hell will break lose over there.
ReplyDeleteSC, hope you're right RE TVIX. Made the #1 mistake of trading and pre-empted the market. Long TVIX from 17.30
ReplyDeleteZig Zag, per your chart its exactly the opposite - we continue higher into mid february, then correct into late feb and RALLY into higher high in march. Very interesting.
ReplyDeleteAM, it's likely that we won't follow it exactly in price, but it should look similar. We could just go sideways until mid Feb and then drop hard into late February. Seasonality speaking, the best returns in the S&P have been from early March to the end of May and it's been positive 9 out of the last 10 years.
ReplyDeleteI see the market differently.
ReplyDeleteThere is sufficient buying volume and very little selling volume to keep the market moving up but with minor corrections. The dollar is making a short term bottom preparing for a monor retracement. This will cause small corrections in equities, gold and silver. VIX will make a small increase but nothing major.
There are no major technical divergences in the traditional indicators.
Lastly the market does not major corrections such as your projections unless there is a major external event.
I will be buying more equities on any weakness.
Just 1 opinion!
Hi SC,
ReplyDeleteI mentioned this earlier and repeating again, I guess what you should see is comparision of S & P and silver chart combine...I don't think S & P and silver will go in opposite direction, so if S&P is going down to 1049 then silver will touch $ 20....
Just my thought
THanks
AM
ReplyDeleteIf you go back through the archives Zig has been opposite for months! jon
SC no offence but this isnt going to be a crash. Just a pullback.
ReplyDeleteSC, if you are bullish on metals - then its december - january all over, markets will not correct hard. There is no fear trade, simply liquidity hitting all risk assets.
ReplyDeleteThere's that word again and..............well, you know the rest
ReplyDeleteSC..
ReplyDeletehow low do you think gold is heading to?
SC
ReplyDeletewhith this dip in gold..what price u looking at?
I've been working on the Gold and Silver charts, and plan to have those out tomorrow.
ReplyDeleteThe SPX chart above does not turn overly bearish until later in Feb. So generally I do see Silver and Gold pulling back short term, but putting in higher highs this month with SPX making lower highs. So from my point of view it all fits.
Well, you see 1289 - 1295 this week....lets see if that plays out. I am in HVU, but nervous to hold it as if the S&P trades sideways rather than down as you are suggesting, HVU will be a big loswer.
ReplyDeleteWell, my nervousness in this bullish market stopped me out of HVU at $8.81, tiny loss. Will pay atention for a re-entry.
DeleteThe Eliot wave guys have been calling for SPX 1000 for some time now. Arthur Hill at freechrart.com had a good discussion on this a few weeks ago. Personalty I think we pull back to shake off some fear and RSI. The bulls will reload and go at it again. Feb 21 looks like our next new High.
ReplyDeleteVIX surging up...
ReplyDeletePerhaps....and just perhaps....Greece announces a deal to stave off the default, S&P surges to 1353, and from there tanks?
ReplyDeleteThe geometry on the above chart should be accurate to within a few points. So I don't see higher prices at all.
ReplyDeleteGreece is likely to bring fear this week, but I don't see it being a major issue. Later in the month I suspect Iran could be the real problem...
SC precious metals and market is going up after opening....Greece decision could change it but do they suppose to make decision today? if it is then are we seeing some hint on decision?
ReplyDeleteThanks
This Greece situation reminds of the debt ceiling talks last summer. The stalemate talks will likely last until later in the week, until the last second.
ReplyDeleteSo that will go well with your expectation of market going red this week...
ReplyDeleteYes, I think mkts decline this week as the talks are delayed. Ultimately I do think that the situation will resolve itself.
DeleteAnyone here thinks that real estate in Canada, specially in Toronto going to drop hard in 2012/2013?
ReplyDeleteThanks
Yes, agreed SC. I do think this is similar to the debt ceiling talks......I don't think the the S&P goes near 1290, but who knows. Look at it strenghtening today, in the past news like this delay would have prompted a major sell off!
ReplyDeleteStock boom, fellow Candians, I tell you Toronto is not the real problem, it is Vancouver that is the real bubble. House prices have doubled in the last 7 hours. The land estimate value of my house has gone up by 400k in just one year. The Influx of rich China men are bringing cash to buy any house here.
ReplyDeleteThanks Curiousmind,
ReplyDeleteBut chinese will stop injecting cash or may inject more depend on how you see chinese economy going, real estate in china have dropped 25% and 56% drop in selling property listing...so may be they will start buying there instead in Canada.
Couple of things though don't believe that outsider can make this huge jump in price in vancouver, as far as Toronto goes you can also say that if Vancouver average home price is 700k then why can't Toronto reach that level? very confusing....
What do you think on mortgage rates? steady till 2014?
Thanks
P.S. sorry SC for bringing this topic here but it is all relevant with economy.
Some general thoughts:
ReplyDeleteCanadian real estate is probably in a bubble, due to high commodity prices. The same would likely be true in other commodity economies such as Australia. The Chinese growth spurt and resulting high commodity prices are a partial reason. Property bubbles can be persistent though, and last longer than seems possible. However, when they collapse it is sudden, and real estate takes a very long time to recover. Real estate is not that liquid, so one has to be careful about trying to sell real estate at tops.
I see some investors holding multiple properties and large mortgages on each. This was once a reasonable strategy, but I would be careful now in the coming years.
I agree SC and that is the reason I brought real estate topic, but people are now calling that real estate in Toronto could shed 25% to 30% in coming one to two years and that is where I feel that room for debate...
ReplyDeleteToronto is booming with immigrants and I am sure Harpers new immigration policy in March will push more for younger immigrants going forward and that can only boost the real estate in Toronto same lime Vancouver.
But again I can be wrong.
If everyone is expecting a drop then the bubble will be persistent and last longer than those expect. It'll go beyond the point of reason, and into the zone of irrational. You'll know the bubble is ready to burst when everyone figures it can't go down. Look out below at that point...
ReplyDeleteThe real estate market is grossly overvalued in Toronto and across Canada. Uncle is a realtor and his advise is to cash out or not buy into toronto market. Uncle knows some bankers who says many mortgages are behind and so banks are trying to work with borrowers to avoid default . Toronto also has a problem with to many flippers in condos and looks to have a miami style crash. Remember miami has the most condo development in NA and now Toronto holds the record. Realtor in the US said everyone wants to retire in maimi and weather is warm and other bs. In toronto its immigrants who will save the day...lol . Canadian housing costs two times more then US housing and the average has always been equal. Smart money has sold
ReplyDeleteI think only idiots will say that no correction in year or two; but level of correction that most are expecting and waiting to jump in real estate are very high, Miami market is not crashed just purely based on high inventory, it has also to do with overall economy and I feel that biggest reason is natural disaster fear....Canadians have not seen this lower interest rates in decade and they are cashing in...immigrants do make and have done big contribution in Toronto real estate...don't forget most of the immigrants comes are highly educated and get good pay within year or so...I can't imagine Toronto real estate at this high without immigrants...
ReplyDeleteyou can not compare USA and Canadian housing market...there are major fundamental differences between practices.
I see real estate growing till prime reach 4%....or I should say no major crash until then...
Sc, interesting article on Silver:Silver packs a punch as chemotherapy drug
ReplyDeletehttp://www.newscientist.com/article/mg21328505.800-silver-packs-a-punch-as-chemotherapy-drug.html
Thank you for the Silver article. I have heard others discussing the potential for Silver uses in medicine. I have not researched this issue myself, but perhaps time to do so. Interesting stuff.
ReplyDeleteSilver is a known antiseptic, has been used as such for ages. Silver bullets against vampires anyone? lol The laptop im typing on has silver incorporated in the keyboard to fight bacterial contamination etc etc.
ReplyDeleteIt is promising for silver to be used in drugs but I believe the consumption could be limited and not a game changer, also it will be replaced by platinum ( we all know the impact of drugs on platinum prices, minimum), and most importantly this could be 5 to 10 years away to become commercial.
ReplyDeleteIt is like natural gas bulls have been calling NG to skyrocket on the news of NG vehicles and what not, but look at the NG price today....
SC, I have a question...your projection of Silver to touch around $ 6 to $7 is void now? or you still think that silver will reach there in year or so.
Thanks
Yes, my longer term price targets for Silver are the same as always.
ReplyDeletesc whats your cycle work showing for this week?
ReplyDeleteTomorrow/Wed look negative in the cycle analysis, Thurs fairly neutral, Fri positive.
ReplyDeleteSc
ReplyDelete"Yes, shorted SPX Friday at 1341"
Where is your stop on this.............tx, jon
That geometry should be accurate to within 5 points at Friday's high 1345. So a stop at 1351 is reasonable.
ReplyDeleteStockboom, I think whether the Canadian real estate bubble will pop has a lot to do with China's economy, at least from what I see here in Vancouver. Recently the CHinese immigrant who came are so rich that they buy their houses with cash and really brought up the prices because of that, since our real estate is so cheap compared to home. The one that suffer with this rise in price is the local people who has mortgages and might be even a 2nd mortgage. The estate tax we are paying is ridiculous. For the people who has only one primary residence, the rise in property value really doesn't help them. I am afraid we might even be looking at subprime crisis here in Canada in the not so distant future when China's economy goes down , and people from China sell their house at any price to cash out.Even all the retails and restaurants here are counting on their spending...it would be ugly if China faces a hard landing, Canada and Australia will go down...CAD won't be this strong forever, that's why I have been selling CAD at this levels...just my 2cents
ReplyDeleteHi SC
ReplyDeleteDo you plan to hold your tvix for tomorrow and wednesday and the bounce off to long position?
Thanks!
The VIX itself has been printing hammer candles lately and looked firm today. TVIX is based on the VIX futures, and has not reflected the stronger VIX today as of YET. It looks stretched on the downside, and this is normal. Once it starts moving I think it'll stretch on the upside. So I am holding.
DeleteFor me it is a short term play. The idea is that I am targeting a move to 1295 or slightly less SPX soon. VIX/TVIX should make a surge higher on that decline.
SC have you seen the baltic index plunge? Seems like a big disconnect to the stockmarket. The market top can not be more then 1350. The bottom should fall out soon.
ReplyDeleteYes, have noticed that, BDI has been a leading indicator in the past. Often it has dropped and bottomed a few months ahead of the market. Thanks.
Deletealot of stuff have been tanking for a while now yet the market seems to be holding up and going higher.
ReplyDeleteA while back eur/usd was fully correlated with the spx not for the last couple of months though. where the euro is right now we should technically be at around 1100 based on the correlation of before.... i smell tuna
Folks, SnP COT data looks funny, guess who has largest long position in the SnP futures right now?
ReplyDeletehttp://img24.imageshack.us/img24/5642/snpcotfeb2012.png
Interesting, thank you.
Deleteam, can you explain that chart further please?
ReplyDeletesmall speculators are holding largest long position in 6 months (close to summer pre-crash levels actually), commercials have significantly reduced long position out of this bottom to pretty much nothing, and large specs are net short.
DeleteI think what the chart is saying that the small specs are always wrong, they always buy at the top, so if they are bullish, the market is about to take their money...
DeleteGreat, thank you. Where did you get that information?
DeleteDoes anyone understand why the vix is up 3.86% and tvix is down 2.31% on the day?
ReplyDeleteSC im following your commentary closely but i am skeptical. Back on August 7th you were predicting 200 - 400 point rally??? now your saying a crash. Can you explain where you went wrong back in August Thanks J
ReplyDeleteBack in July/August I always had the date correct for the bottom. All July I had said to watch for the low Aug 9-10. I tend to be early at major turns because much of the work has to do with big picture patterns.
DeleteRemember, in Aug/Sept many were expecting a major crash. My big picture pattern showed that the market would find support in the summer and rally.
Now, I am targeting 1049 which is much lower than current levels, but only 25 points under the Oct low. I am not overly bearish...
SC, the reason why people keep bringing this up (i questioned it myself too) is because in that case you got your timing right, but your prices were all wrong. You posted on the weekend of the downgrade that you was expecting the market to have a MAJOR rally on the Monday and it didn't, instead it tanked. Not that anyone here has a crystal ball, but I'm pretty sure that is where some of the questioning is coming from.
DeleteAlso, as of late, your price points and timing has been somewhat accurate (as much as can be expected, and I'm not talking about December or early January because you were incorrect on both counts there).
So just take this as constructive criticism. The more care you take in your predictions in order to ensure accuracy, the more respect you will garner. You have my respect because I know that you are simply relaying what you see, and as well because you have taken the time to respond to my emails which I appreciate.
Good luck everyone, market is looking like its topping, but I think the top will come after the Greece deal is announced, which will happen.
In that case I turned bullish one day too early which was a mistake because I should have stuck with my timing which was correct.
DeleteThe cycle analysis working:
ReplyDeleteSCFeb 6, 2012 01:10 PM
Tomorrow/Wed look negative in the cycle analysis, Thurs fairly neutral, Fri positive.
Seems like TVIX won't really be moving for the short term then? I'm thinking of getting out at break even in the 14s and get back in at a later time. Equities just seem to rebound every day.
DeleteI'm targeting a move over $21 short term. The upper wedge line is around $15. Once that breaks it'll go wild on the upside imo.
DeleteHi SC
ReplyDeleteyesterday and today looks negative? if it is negative now, I cannot imagine when we are neutral and positive, we may shoot up to sky high...
Are you still aiming for 1290 ish? which is almost 50 point down this week?
Thanks!
No, I said that yesterday. Today Feb 7th and tomorrow the 8th look negative.
DeleteI think we could hit 1295 or a little lower by this Friday.
so you thinking we go down below 1295 tomorrow since it look negative (Big dive by the way), have a neutral day (nothing happen), and then bounce back to 1295 or lower on friday (positive day)?
DeleteThanks!
We'll see. Friday could be a bottom. It looks positive so markets could rise from a bottom.
DeleteI still think Gold and Silver are pulling back. So this is just a bounce on the way down imo.
ReplyDeleteSC, 20/50 DMA cross over on the dollar index might drive metals higher from here. Its all about dollar right now.
ReplyDeleteA plunge feels imminent to me. We're in the top ticks here. I'm staying short.
ReplyDeleteby plunge do you mean rally... breakouts everywhere
ReplyDeleteJust as a comment from a newbie to the comments section- SC has been extremely informative when it comes to large move timing and direction on the majority of occasions (not 100% which would be next to impossible). This is no small achievement. Specific entry/exit points on price estimates can be very tricky especially at tops. I use SC along with other analysis techniques and they sometimes differ where SC was dead on at times and mine was closer at others. Major tops look like nothing can possibly turn them over when you look at the price action. When they do happen, there is no fanfare or headline declaring the 'top'. Top-picking can be deadly as I have learned over the years. For the best chance remember the more extreme the indicators, the bigger the move so you can afford to be patient as there will be a lot of points overall. Try and use a wide crayon trendline to scale in and be patient and always let stops run out if they have to because 100% accuracy is just not likely to happen. My own analysis says we may have a few more points/days to run yet. But if that does not happen and we already topped today, no worries, still a lot of potential points even if you miss a few days.
ReplyDeleteToday market reaction tells me that Greece is voing to default. there is no other reason they can come up with for dropping market...
ReplyDeleteNDX has been weakening for the last 2 hours. SPX won't hold for long.
ReplyDeleteMarket is ready to break higher, No short are allowed!
ReplyDeleteAM's chart was interesting show that its small retail that is driving the current levels, with the big boys positioning for a drop. Where would you get this information?
ReplyDeletehttp://img24.imageshack.us/img24/5642/snpcotfeb2012.png
S&P now at 1350 almost......does the Greek deal get done? Perhaps it does and pushes the S&P to 1370. I have taken a majority short position at 1347 and saved some if it does happen to take off to 1370 where I will go all in short.
ReplyDeleteLower high for RUT today from Fri, NDX put in a lower high on this last push. Rally over.
ReplyDeleteCOT reports every friday, so its 3 days old data at this point but you get the picture. Notice how commercials are undecided but still net long (even though at 99% reduced levels). they are not shorting this as of last friday. in the summer they were net short! Everybody can be wrong though, but thats where big inside money is positioned right now - waiting. Please correct me if im wrong on any of this guys, im just looking at this at making my own conclusions.
ReplyDeleteSC, DOW is just 150 points away from magical 13k, do you think it will hit there before turning back....
ReplyDeleteAlso I am surprised that why risk trade is at pick when Greece news are positive!i.e. gold and silver going higher or news of deal?
Thanks
Well if this correct SC is correct that the crash is upon us.
ReplyDeletehttp://www.markettrak.com/special4_100.html
THis is another reason it's best to trade what is in front of you!! jon
ReplyDeleteFrom Jaywiz posts......who was absolutely certain!
Jay StraussFeb 1, 2012 06:04 AM
Feb 2nd should offer the best shorting opp for SPX, gold & silver as well as oil - Feb 10th should be a pivot low leading to a Feb 17th high, and second shorting opp this month
Jaywiz
Ive found several SCIENTIFIC RESOURCES that have been very useful for market timing- come on by and read.
SPX looks like right now today & FEB 2nd building and EDT from which a substantial set back into FEB 23rd is likely.
Jaywiz
READ STUART comments above- applies to JAYWIZ ALSO
ReplyDeleteJay,
ReplyDeletePOINT is you were WRONG and to talk of %85 to %90 correct calls is unconscious at the least! Many new traders might believe that.............lol Best to trade what is in front of us with an eye on the rest or you will not be trading at all! Zig ZAG has been the best by far! No disrespect to anyone but just go back through posts for yourself!
jon
JON.
ReplyDeleteI NEVER SUGGESTED MY MARKET CALLS ARE 80-- 90% CORRECT !!!!
I DO NOT TALK 80 to 90% CORRECT CALLS
ONLY ONE COMPONENT -the EKG is correct 808% of the time for the NEXT DAY
YOU HAVE MIS READ WHAT I WRITE !!!!!!
Jay