$VIX - Cycle Update - Three Blue Arrows

The blue arrow Cycle high appears to be complete.  The Cycle predicted the VIX high would consist of three spikes.  That has, in fact, been the case.  The Cycle continues.

Therefore next, VIX should decline short term to the yellow arrow Cycle low.  VIX around 10 looks possible for the yellow arrow low.

The Cycle suggests a volatile summer ahead though.  Assuming the Cycle continues to play out at the current pace, the first yellow arrow low is due in a month or so.

4hour Chart

VIX Cycle 1:

$SPX - Major Trendline to be Tested

SPX is peaking with a decline anticipated for the rest of the year.  The current market is simply quite overextended, and exhausted.

In contrast, VIX bottomed in March of 2013 - a year ago.  VIX has been rising for over a year, and that is a clear warning signal.

A decline for SPX is likely to be choppy with significant bounces on the way down as it corrects to the trendline from 2009.  A 250 point decline is estimated for SPX from the current level, and that represents a 13% decline.

3day Chart

$VIX - Forecast Update

VIX held the support level specified in the VIX forecast.  As well, VIX also surged up last week in tune with the rise shown in the VIX forecast.

VIX tested the midfork on Friday, and some mild resistance for several days could be expected.  Short term, the next high is targeted for VIX late this month.

Overall the VIX Cycle shows an elevated VIX for a couple more months.

60min Chart

Forecast:

2hour Chart

$VIX - 2 Month Forecast

VIX is currently finding support at the turquoise fork, and around the pink support line.  It is a very strong level of geometric support for VIX.

The trend is likely to remain up for VIX for several more months according to this Cycle. 

Therefore, SPX is due to hit a high within a few days, and a several month downtrend for SPX is forecast into May.

2hour Chart

VIX Cycle 1:

$VIX - Cycle Continues - Blue Arrow

VIX reached the target area and blue arrow Cycle high.  Currently, VIX is near the pink support. 

The Cycle shows two more peaks coming.  The next peak is due in February and another in late March or April according to the Cycle. 

Therefore, VIX is likely to find support soon and rise sharply to the next peak.  The next peak for VIX may even be slightly higher than the blue arrow.

2hour Chart

VIX Cycle 1:

$VIX - Cycle Continues - Update

VIX formed the purple arrow Cycle low.  The result was a breakout for VIX above the white trendline. 

Next, VIX should be rising to the blue arrow Cycle high.  Unlike the past spikes for VIX, this time VIX should remain elevated as the blue arrow high forms over a period of 1 to 2 months. 

VIX is testing the red resistance currently, and may need to consolidate somewhat before continuing to rise up to reach the blue arrow high.

2hour Chart

VIX Cycle 1:

$VIX - Large Move Due in Symmetry

VIX has been flirting with the white and red trendlines.  The VIX Cycle suggests a move above the white trendline from 2008 is imminent.

VIX has been trading higher since March of 2013, and clearly that warns of declines ahead for SPX.  A large move is due in the symmetry.  

4day Chart