The turn date for SPX was due February 26th, and so there is little time left for SPX to form a high. The next turn date is March 14th.
Oil and SPX remain highly correlated which raises the probability for Oil to capitulate, and bottom out in the next several months ahead.
60min Chart
UVXY declined as expected from midfork resistance and is near lower fork support. UVXY has formed a clearly rising trend, and may have several months of substantial upside ahead according to the model.
60min Chart
The behaviour of XIV continues to be consistent with the Hang Seng Crash of 1997. XIV may have several months of significant downside ahead according to the model.
2 hour Chart
1997 Hang Seng Crash Model:
im waiting for vxx to hit 20-21 ish, not ideal to use uvxy because of the decay and contango
ReplyDeleteWhat happened to 2080 in March?
ReplyDeleteMy price targets have been hitting, but they have been hitting slower than originally anticipated. At the pace the market is moving that larger rally is coming but rather than starting in March is due to start in a couple months.
DeleteWe're still just in the early stage of a bottoming process for SPX in my work. It's not a bear market, but it is a weak market.
So can you please describe what is your longer term outlook for the market? If it's not a bear market when do you expect this bull market to top and a real bear market to start?
DeleteThis is a weak and choppy market but not a bear market by definition. We're going through a correction, an adjustment. A real bear starts in two years is probably several years away yet.
DeleteI would be a little cautious shorting oil if some may be thing of that. It may cool a bit for several weeks next, but may be higher around April 8th than currently.
ReplyDeleteIn later April or May I may be interested in a long position if the price is optimal. I'll wait and see.
SC, is there a possibility we don't dip to 1700s as you suggested in 14 days?
ReplyDeleteAre there alternative scenarios?
I have two downside targets for SPX. 1840 and 1780. So it is simply a matter of timing. Around 1840 is the target due to be tested in mid-March based on the pace of the market currently.
DeleteThe 1780 target is unlikely to be tested until after March based on the current pace.
By definition a bear market is a decline of more than 20% from the high. SPX just looks really choppy this year. Partly the drop in oil prices has had a negative impact on the market. The reason is simple. The oil companies shares have declined and since they are a part of the S&P 500, the index has declined.
ReplyDeleteOver time though the lower gas prices stimulate the consumer.
You see the oil price drop had an instant negative effect on the index, but over time the economy is actually stimulated. Things will settle down with oil this year as the price stabilizes and adjustments are made to low oil prices.
ReplyDeleteSo it's a year of adjustment. There are some negative spots and some very positive spots this year. Rangebound in the 1700 to 2100 range is to be expected. We're not in bear market territory though it is a weak market.
The next several months do look weak.
ReplyDeleteThis summer looks very positive for the market, and there will be another large plunge later in the year.
UVXY hit the lower fork support this morning, and making a bounce.
ReplyDeleteThe first target for UVXY is around $45. The second target is in the $70's to $80's!
ReplyDeleteSC, what's your timeline for the second target? thx
DeleteMay for the second target.
DeleteSold XIV at $20.70 from $20.20 entry.
ReplyDeleteVIX 16.08 gap.
ReplyDeleteWell, the fact UVXY is lower today with SPX lower today also probably suggest a little more downside to come for UVXY.
ReplyDeleteXIV is getting overbought but not extremely so yet. A little more time....
ReplyDeleteFor example RSI(14) closer to 70 ideally on the daily chart of XIV would be extremely overbought.
DeleteSPY will hit 200 before it turns.. XIV is extremely over bought.. SC, What's your thought on it?
ReplyDeleteI agree, the market is grinding higher, attracted to near the 200dma for SPX. Things can get more extreme before it's ready to drop. Probably it can continue to grind up next week before it turns lower.
DeleteXIV is extremely over bought!! SC SOLD his yesterday. What does that mean to YOU?? Can it still go up a little - yes. Is it near a top - yes.
ReplyDeleteUVXY is a decent price, but can still drift lower before it turns up.
ReplyDeleteFor stops I would say if SPX breaks out above the 200 dma with conviction. In addition, time stop mid-March.
The action should be in mid-March.
Urban Carmel @ukarlewitz
ReplyDelete$RUT - RSI (5) = 88, the highest since July 2013
Interesting, thank you.
DeleteNew chart posted!
ReplyDelete