Complacency is going parabolic which ultimately is extremely bearish for the S&P 500. In fact, it confirms a major topping process is underway for the S&P 500.
3day Chart
Parabolic XIV 2017 Model:
Friday, March 3, 2017
XIV - Upside Going Parabolic!
The movement in volatility is unprecedented. XIV has broken above channel resistance, and is configuring into a parabolic melt up.
Complacency is going parabolic which ultimately is extremely bearish for the S&P 500. In fact, it confirms a major topping process is underway for the S&P 500.
3day Chart
Parabolic XIV 2017 Model:
Complacency is going parabolic which ultimately is extremely bearish for the S&P 500. In fact, it confirms a major topping process is underway for the S&P 500.
3day Chart
Parabolic XIV 2017 Model:
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SPX is in a conventional topping profile. The action is unique volatility.
ReplyDeleteI do see XIV going parabolic which is a measure of complacency. For the S&P there is no sign of such a move. Basically traders are becoming overly complacent, but the market is actually in a topping profile.
ReplyDeleteThe moves ahead in volatility look massive, unprecedented. Incredibly exciting for volatility!
ReplyDeletewhat is your prediction on xiv since you bought at 66.15
ReplyDeleteXIV may retest the February high of $70 short term. The major support is around $58. That level could also be tested.
Deletewow incredible if that happens..i see that overthrow on xiv as a false break out about to return to earth
ReplyDeleteYes, it should be interesting, and a lot of fun!
Deletewhats the model based on a fractal of what?
ReplyDeleteI do like to use real world examples, Cycles, and models, because really a picture is worth a thousand words! The idea is to show the future before it happens!
DeleteHi SC. My question is do you think we start to drop right now in the S&p or will it go sideways for about a week before we touch like 2230?
ReplyDeleteWe'll see what happens next week. I suspect SPX turns lower around next Friday March 10th.
DeleteXIV has largely decoupled from SPX. It's highly unusual. Characteristic of an irrational market.
ReplyDeletedon't understand xiv at 66 how high then to 58
ReplyDeleteI'm not certain XIV will pull back much so I decided to take a position. It may only consolidate sideways. I would add on dips. If there are any that is!
DeleteSpeaking about volatility and SPX, there's been a positive correlation between the two the last 10 to 20 days. Things can get a little interesting here. Here's a link to a chart: http://imgur.com/kEQiSZx
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteThank you! Great chart!
DeleteHeres a longer term view on spx/vix correlation
Deletehttps://twitter.com/voodoomarkets/status/838027417021214720
Hi SC,
ReplyDeleteno offense, but this is bullshit. XIV has not decoupled from SPX it is tracking VIX and it will not move parabolic further - the top is behind us.
XIV went parabolic because complacency skyrocketed we saw values below 10 historically low values seen only in 2007 and 1997 I think.
When do you have max complacency(min VIX -> max XIV) - it is not when the market makes major top it is before that and then divergences follow.
Two links below - the first is a VIX chart comparing with 2007 where I was showing that we are at max complacency(the blue arrow) and we have two more tops(see your previous post:) with VIX divergencies. The second is XIV simulated further back from exception which confirms my thoughts that the parabola and max complacency comes before the top.
What we are seeing is wave 3 of V with max complacency(min VIX -> max XIV). SPX will make higher high, but from now on VIX will make only higher lows and XIV only lower highs. The parabola is over.
Your previous post is spot on this one.... just forget it.
https://3.bp.blogspot.com/-03UcXbhz7-I/WK6dr2CjikI/AAAAAAAAHF8/Ko8BKZUStNk9CObVNZEWfSS_w4f2PRQrQCLcB/s1600/w284-7.png
https://sixfigureinvesting.com/wp-content/uploads/2014/05/XIV-hist-Mar2016.jpg
Hi, Can you provide the dataset for simulated Xiv and Vxx prices ? Thanks
DeleteI do not have data. They chart is from a guy which is specialized in volatility.
DeleteSee the page below I think the data cost some money:)
http://sixfigureinvesting.com/2013/09/backtests-for-volatility-etn-etf/
SC,
ReplyDeleteI thought you had UVXY going to 100-150 this year?
So does your XIV parabolic chart completely NEGATE your UVXY parabolic chart from December 20?
Confused.
A v-bottom is forming for UVXY, and that remains true. The previous target was based on a shallow v-bottom. A move above $75 for XIV would invalidate the previous target, and confirm a deeper v-bottom.
DeleteKrasi,
ReplyDeleteThank you, interesting charts. I had initially thought XIV would form a conventional top around the middle channel line. Resistance becomes support once broken. With the break out into the upper channel it now appears that complacency is going parabolic. It makes sense that this would happen before a bear market even though of course it's irrational behavior - "Irrational exuberance".
UVXY has given the signature that it's forming a v-bottom. So the question is only how deep is the v- bottom. With a conventional top in complacency it would be a shallower v-bottom. With a parabolic top, deeper v-bottom. Still a v-bottom either way.
What I like about the chart and model is it's simplicity. As long as XIV holds above the middle channel line it looks bullish. I like the probability of it playing out. We will find out soon enough...
i agree with krasi however this massive move in xiv doesnt seem likely so its an easy position to take. I agree xiv has topped more or less its going to lose support and retest this level 1 or 2 times again http://imgur.com/a/qI0wp
ReplyDeleteThank you, nice chart!
DeleteThe strength in XIV is amazing. I would look to take profit around $72 though. The slope is too steep so it should pull back. $72 to $58.
ReplyDeleteXIV is the TRUMP Trade!
ReplyDelete"The stock market is on a 48-day run of not having moving up or down more than 1 percent in any single session, something that rarely happens and is all the more remarkable considering the political commotion since President Donald Trump took office nearly four weeks ago. The level of realized volatility is the lowest in records going back to 1962."
"Indeed, betting against volatility has been the best Trump trade of them all."
"The VelocityShares Daily Inverse VIX Short-Term exchange-traded note bets against the index over one- and two-month periods. The wager has delivered a 78.6 percent gain over the past three months and is up more than 318 percent during the past 12 months."
http://www.cnbc.com/2017/02/16/the-hottest-trump-trade-of-them-all-just-set-a-new-record.html
Actually, the Trump win brings a lot of big money into the market that would not jump in with Clinton victory...
DeleteRepublicans are the party of big money, though the democrats are trying hard to get there...
So is making CNBC headlines the death of that trade? If not now, I think soon :-)
ReplyDeleteYes, that is a good point. I have a chart coming that will expand on this idea. It'll explain the different phases in this parabolic move.
DeleteXIV too rich for me.
ReplyDeleteWill wait on the sidelines for better risk:reward ratio.
Good luck to those riding the xiv wave.
Agree, a pullback is due. The slope is too high, and appears unsustainable short term. XIV should be forming the red arrow high and pullback to the green arrow low.
Deletexiv is too rich..i agree look at vxx or uvxy soon..xiv is topping
ReplyDeleteInterestingly notice that the trump trade actually started in February 2016.
ReplyDeleteFar more interested in the second half of the XIV chart....looks like it should retrace the entire 2016 move....
ReplyDeleteLet us know when you are short XIV
Absolutely. It's going to be a crazy year, haha!!!
Deletesc your thought still feeling 72 on xiv
DeleteYes, XIV warming up for a test of low $70's. This month contango is preventing UVXY from popping.
DeleteXIV $72 next week then it'll be ready for a dip to $60.
DeleteThe Cycle remains negative for Gold and Silver for years. That doesn't mean they can't pop short term. It just means lower prices are to be expected a year or two from now. Because the Cycle is down, I'd be cautious.
ReplyDeleteNext high for XIV due March 15th.
ReplyDeleteCould it still be a lower high not to exceed 69.98?
ReplyDeleteNot much room for XIV to decline this month. Next high is coming due March 15th for XIV in the low $70's. Low due March 27th probably around $65. Then high April 6th.
ReplyDeleteApril looks better for a pullback than March for XIV.
from 65 up to what on april 6th your thoughts and thank you also after you sell xiv at 72 are you going to buy uvxy have a blessed day
DeleteOverall, yes, the daily chart suggests consolidation for XIV. However, the weekly XIV chart looks incredibly strong.
ReplyDeleteso your intentions are to go long at 65 and then up to how high? your thoughts and thanks
DeleteA high for XIV is due today. I plan to exit and may consider UVXY. The next low for XIV is due March 27th.
DeleteI am expecting XIV to cool off to around $65 by March 27th and then back up to test low $70's April 6th.
After that could see a dip for XIV to $60.
XIV rising according to plan. UVXY is having difficulty due to contango this month. Next month is more favourable for UVXY to pop.
DeleteSCMarch 9, 2017 at 6:32 AM
"Yes, XIV warming up for a test of low $70's. This month contango is preventing UVXY from popping."
The "trump trade" continues to be alive and well. The obsession with trump continues as shown by yesterday's top google search and today's top yahoo search for "Donald Trump".
ReplyDeleteAs they say in show business all publicity is good publicity!
Took profits and sold all XIV at $70.65.
ReplyDeleteI'll wait in cash and see now. May be interested in UVXY entry this week.
ReplyDeletewhere would be a goos buy on uvxy
ReplyDeleteLouis,
ReplyDeleteUvxy probably 15-17 like SC predicted.
Not sure if XIV will do the 70 to 65 to 75 to 60 thing. It seems quite weak and waiting for an excuse to fall. $45 is what i am waiting for with XIV (better risk:reward)
would it be prudent to buy uvxy here since you are looking for viv to cool off to 65
ReplyDeletesc uvxy looks like a buy under 17 what do you think your opinion
ReplyDeletexiv hit 72 target congrats
Uvxy is interesting. I'll be picky with an entry though because I don't see the upside being that attractive. $16 with a small pop to $19.
ReplyDeleteI expect it to pop better in April rather than March.
SC,
ReplyDeleteWhen do you expect fireworks to start with xiv/uvxy?
June FOMC?
The big peak due around July 4th. Perfect time for fireworks!
DeleteSC,
ReplyDeleteWhen you say big peak due around July 4th - do you mean peak in prices for UXVY or S&P 500?
Peak for XIV due July. For S&P peak due May finishing a double top July.
DeleteVix to 9.9, 9.6, 9.3
ReplyDeletesc you going long uvxy or waiting till 15
ReplyDeleteGoing long UVXY soon.
Deleteyou mean next week right
DeleteLet's see how it looks near the close. I might enter UVXY if it dips. I like the reaction here.
DeleteNew chart posted!
ReplyDelete