UVXY
S&P 500 and possible VIX play4 hour chart for S&P 500
So as promised, here is my take on the S&P 500 and where I see things moving in the next two months.
I feel very confident that we have just completed the 4th corrective wave of this 5 wave impulse. As you can see, this 4th wave is shallow and complicated. And the 2nd wave (Brexit) is deep and cleaner. So all that is left is the 5th wave. I placed OI options price targets in the chart. I also measured what 50% and 75% gain of the 3rd wave would take us as far as the 5th wave is concerned. For the 50% growth price target, we would reach 2215-2216. For the 75% growth price target, we would reach 2240. However, price action will dictate the final outcome. I also measured the amount of time in days and bars for wave 3.
So what my analysis is pointing to, and what I am leaning towards, is a micro 5 wave growth, topping around the 2215 range (red line). I just don’t think we go much higher because it seems too steep for those OI price targets. Either way, it appears that we will make all time highs. (blue line signifies the last high) ATH’s will help solidify the Feds decision to raise rates as they would not raise rates if the market showed weakness like it has this last couple weeks. It appears we top around the end of November and start a steep ABC correction, with C being the big one that would coincide with the Interest Rate hike.
Unless we get a black swan event that triggers this fall (doubtful) I am pretty sure they raise rates in December. So I will be playing the VIX at the end of November. If anything changes then I will update this post.
And just to touch on Yellens latest comments. Of course she and others are going to start to be Dovish. They want the market to go up so they can raise rates. Talking like she is uncertain is BS and helps kick start this 5th wave.
So there it is, short and sweet. Hope you like it and hope it is helpful.
UVXY- Long at the break of 17.37 UVXY forming a really good base, and seems forming a fallen angel pattern. It also has moneyflow divergence,
if it can break above Moving average it will have a good upward run.
On the option side we would consider $20 January calls ($4.34)
You can check our detailed analysis on UVXY in the trading room/ Executive summary link here-
www.youtube.com
Time Span:2:15 "
Trade Status: Pending
Clean and Tight Wedge Ready to BreakoutRSI showing signs of support and wedge ready for a breakout $UVXY $TVIX
QQQ needs a pull backQQQ starts topping here, not a good sign of pushing up. buy some puts this time.
Trading against the holy grailI see an epic opportunity arising in VIX related products like UVXY and TVIX and would like to share my opinion on this.
As most are aware, articles are popping up left and right saying that shorting the UVXY is a 100% risk-free long term investment . Some go further and label the VIX short as the trade of the decade. Moreover there are figures actually showing that funds are holding huge net short positions as of now . The icing on the cake is provided by the crowd who is finally attracted by the „cheap“ price tag provided by the intrinsic decay of he aforementioned VIX products. People do the math and come up with the conclusion that shorting any UVXY pop WILL make them money eventually. This is it ladies and gentleman the 100% sure fire holy grail type of trade we have been looking for. Even the most experienced fund managers can’t believe that such an instrument exist. It is finally here to make us all a fortune in the long run. Some funds actually state that they add to their net UVXY short on every 3% UVXY price advance putting them in a better risk/reward position. This is brillant stuff!
However what happens if we have a real market decline like in 2008? UVXY never saw such a market enviroment as it is a QE era instrument. UVXY never spike much more than 500% but that doesn’t mean it is not capable of doing so. Central banks might come up with another round of artifical market life support and the crowd might give it a clever name like...QE4. But what if the central banks really run out of ammo or the fourth iteration doesn‘t work like the others? I agree with the opinion of many that this market is a little bit too much FED dependent right now.
In fact bond market bulls are arguably in the process of seeing a change in character after 35 years of advances . And such a change in character in such an important trading instruments is meaningful stuff. Of course everything is possible and all that talk about market crash here and bubble burst there could also be a nice breeding ground for a real bull market thus leaving this 16 year secular bear market behind. Nobody knows! Whats so scary is he fact the even the latter scenario doesn’t rule out a 1000% short term UVXY spike.
Shorting UVXY as proposed by these guys is like trading an automated martingale forex trading system. You will make many many small profits but you can go belly up in an instant. Still the so called pros see it as a 100% risk free investment.
This actually doesn’t need many more words hence I make it short. I believe that the UVXY can just go up so much that even the toughest shorts are forced to cover. There is no such thing as a 100% sure investment. And going long UVXY could provide the opportunity of a lifetime for quick profits. And last Friday with the broad declines across the board could have been just the beginning.
Hence the real trade oft he decade in my opinion will most likely be going long UVXY hence fooling the hedge funds and the crowd... as usual. And I am not afraid to take that trade.
www.focusedstocktrader.com
www.zerohedge.com
blogs.barrons.com
www.hedgopia.com
www.wsj.com
www.marketwatch.com
SP500 bottom estimateMy estimate for the bottom is on the chart. Then up up and away until December or January Fed rate hike
UVXY - Long from 20.15 to 38.33After a huge decline UVXY seems getting some ground at present level, which is a historical strong support zone for VIX. Nicely scooping upward & moneyflow is getting some strength. We are looking for a log from here for long time and our target is 38.33
On the option side we are looking for Mar2017 25 call
You can check our revaluation on UVXY in the trading room/ Executive summery link here-
www.youtube.com
Time Span: 26:20"
Trade Status: Entry Criteria met Aug 10th
VIXM long when RSI approaching 50In my prior VIX ideas, I analyzed VIX value trends. I noted that the mid-term VIX etfs/etns (VIXM and VXZ) tended to trend downwards over time and also lagged behind VIX value movements. After then analyzing VIXM, I noted these observations can be seen quantitatively in the RSI. Note that the VIXM is usually declining with a negative RSI. Successful VIXM long trades appear to occur as the RSI trends up and crosses 50. Volumes are usually high as well. While I opened long positions in VIXM and UVXY, that was premature and these will not do well short term. Certainly a cost averaging approach can work but VIXM reacts slowly. I will not buy more VIXM until the RSI is trending up towards 50 with increasing volumes. Since these low VIX episodes occur during strong bull markets, drops in the S&P 500 (and rising VIX) are leading indicators for going long in VIXM.
VXX should open upThe VIX futures had a strong move up after the market closed. the VIX rtfs/etns should open higher. The high volumes also correlate with improving RSI. It is not clear whether the SPX500 will keep falling with increasing volatility going forward. tntsunrise shows a possible rise in the SPX500 to a shorting zone, then a further fall. VXX may be traded in the short zone if that happens. A starting VXX position may be taken here with a stop loss. Check the VIXM chart for a daily RSI approaching 50 in an uptrend per my prior post. Big rises in VIXM requires several days of SPX500 crashing. Note the VIX rtfs/etns usually decline except when the SPX500 is crashing/falling. They are not truly coupled to the VIX but are like fiat currencies.
VIX Bull Market BehaviorThe VIX is now at a 52 week low. This may be a one day event or a several week event.
The following data are meant to help guide the decision as to when to buy/go long on the short term and midterm VIX related etfs/etfs. The VIX daily minimum and closing prices were downloaded from the CBOE website. The % of days with daily minimums and daily closing prices were then analyzed from May 23, 2014 to August 5, 2016.
The time from May 23, 2014 to July 24, 2014 (43 trading days) was identified as a bull market run withe the VIX closing < 11.5 on May 23, 2014.
May 23, 2014 VIX closes at 11.36
July 24, 2014 (S&P 500 Daily Cycle Top) at 1988.
July 24, 2014 VIX closes at 11.84
From May 23, 2014 to July 24, 2014 (43 trading days):
The VIX close was < 10.0 zero days (0 %).
The VIX close was < 10.5 one day (2.3 %).
The VIX close was < 11.0 nine days (20.9 %).
The VIX close was < 11.5 fifteen days (34.9 %).
The VIX close was < 12.0 thirty one days (72.1 %).
The minimum VIX close was .
The VIX low was < 10.0 zero days (0 %).
The VIX low was < 10.5 three days (7.0 %).
The VIX low was < 11.0 thirteen days (30.2 %).
The VIX low was < 11.5 thirty one days (72.1 %).
The VIX low was < 12.0 thirty seven days (86.0 %).
The lowest VIX was .10.26.
The VIX closed below 11.5 until August 22, 2016
After that, the VIX did not close below 11.5 until August 5, 2016
For traders interested in going long on the VIX rtfs and tens, positions may be opened when when the VIX is < 11.5 and especially when VIX is < 11.0 and < 10.5. For the midterm VIXM and VXY, a cost averaging strategy could be considered. I added to my VIXM position on 8/4/2014 and added UVXY calls on 8/4/2016.
SPY Not a lot of support to 210 if 20 day SMA breaksNot much support below 20 day SMA IMO. This long term consolidation has created a huge resistance and suggests this isn't recovering soon.
Stable signals (consolidation) reveals greatest historical cluesIn terms of systems theory, this is a great example where this may or may not go. This is a very stable signal rarely seen with random signals, such as the market. Therefore, math becomes more important than ever! And convergence/divergence becomes 'less' meaningful. I'm waiting for the green or red line to break and believe this will signal THE move. bullish or bearish. For now, cash is king! $SPY $NYA $SPX
VIX Long: Quantitative analysisThe following data is meant to help guide the decision as to when to buy/go long on the short term and midterm VIX related etfs/etfs. The VIX daily minimum and closing prices were downloaded from the CBOE website. The % of days with daily minimums and daily closing prices were then calculated in three over 3 time periods ((the last 12 1/2 years, the last 9 years, and the last 2 years).
Note that there are periods of low volatility during strong bull markets, especially the housing bubble .
DATASET #1 Last 12 1/12 years:
CBOE VIX daily minimum prices from 1/5/2004 to 7/29/2016.
Last 3165 trading days days (from 1/5/2004 to 7/29/2016).
Vix Value Number of days % of days
< 10 12 0.38
< 10.5 62 1.96
< 11 144 4.55
< 11.5 250 7.90
< 12 384 12.1
CBOE VIX daily closing prices from 1/5/2004 to 7/29/2016.
Last 3165 trading days days (from 1/5/2004 to 7/29/2016).
Vix Value Number of days % of days
< 10 4 0.12
< 10.5 35 1.11
< 11 92 2.90
< 11.5 174 5.50
< 12 302 9.54
There was an extended period of low volatility during the bull market run from November 2004 through June 2007 (the housing bubble).
Since then, low volatility has been much less frequent.
DATASET #2 Last 9 years:
(9 years plus 1 month)
CBOE VIX daily minimum prices from 7/2/2007 to 7/29/2016.
Last 2287 trading days (from 7/2/2007 to 7/29/2016).
Vix Value Number of days % of days
< 10 0 0.00
< 10.5 3 0.13
< 11 14 0.612
< 11.5 39 1.71
< 12 83 3.63
CBOE VIX daily closing prices from 7/2/2007 to 7/29/2016
Last 2287 trading days (from 7/2/2007 to 7/29/2016).
Vix Value Number of days % of days
< 10 0 0.00
< 10.5 1 0.04
< 11 9 0.39
< 11.5 18 0.79
< 12 50 2.19
DATASET #3 Last 2 years:
CBOE VIX daily minimum prices from 8/1/2014 to 7/29/2016.
Last 504 trading days (from 8/1/2014 to 7/29/2016).
Vix Value Number of days % of days
< 10 0 0.00
< 10.5 0 0.00
< 11 1 0.20
< 11.5 5 0.99
< 12 31 6.15
CBOE VIX daily closing prices from 8/1/2014 to 7/29/2016.
Last 504 trading days (from 8/1/2014 to 7/29/2016).
Vix Value Number of days % of days
< 10 0 0.00
< 10.5 0 0.00
< 11 0 0.00
< 11.5 1 0.20
< 12 12 2.38
The net results:
I am setting trade alerts to notify me of VIX trading <12, < 11.5, and < 11.0.
I will buy the midterm VIXM and VXZ when the VIX is < 12.
I will consider buying the short term VIXY and VXX and the short term 2x leveraged UVXY when the VIX is < 11.0. The short term etfs/etns should not be held long term due to losses due to cotango. The daily leveraged etfs also usually decline due to daily rebalancing (I haver not checked UVXY on this0. The midterm etfs/etns decay more slowly over time (see my other posted VIX idea).
Note that if we enter a sustained strong bull market like the bull market run from November 2004 through June 2007 (the housing bubble), this strategy will not work well. I am in the camp that a debt crash will occur at some point in the next couple of years. Also the US population will be going over its demographic cliff. .
Note that, if we undergo a major crash, we may not see VIX below 12 for Note the highly respected chartwatchers (whom I trust a great deal) thinks we will be in a bull market for the next 1-2 years.
S&P Pullback Then Continuation To New HighsAs I noted in this idea from a week ago, we were going to new highs, which we did, but now we're ready for a pullback before continuing on. I think the chart has one more bounce up in it, but then we'll come back to the 2070s before going to 2185. The Day/Weekly/Monthly COGs/CMF/Waves all look strong, but haven't broken into any higher levels of momentum, so the earlier time frames are going to pull us back. 2148 is my target, but I might get in earlier than that.
SPX looking to pull back after July 4th Weekend.Hi, this is my first published chart on the site. Keeping it simple this is what I'm seeing after the last brexit week recovery. To me it looks as though there is enough information to warrant the creation of a new downtrend channel based on the lower highs after 6/8/16. I don't know if SPX/ us markets will open higher on july 5, but I currently think a market pullback will be the next move. Good luck and any comments and feedback are appreciated.
SPX500 Trade Plan if a key pivot is inThe chart shows a modified schiff pitchfork based on the Brexit panic drop and assumes a pivot is "in" from Friday's close.
That is a big "if" but basis for it is:
- Weekend headlines on Brexit are thin on immediate consequences,
- Google analytics show loss of interest in "brexit", "nasdaq" and "S&P500." The later 2 don't happen when retail investors are worried about their 401Ks (see here twitter.com)
- Normal impulse / correction dynamics point to a retrace once immediate impulse is over. That may have been Friday.
Point is, if SPX500 opens higher and holds, the key Fibonaccis line up very well with a flat top kumo at P3 and the 50% fib (which was predictably hit intraday on Friday) and the higher 61.8% fib lines up very neatly with a key support / resistance line from the last 2 weeks of trading. The next fib conveniently coincides with 2100 - a nice number that many will judge as a "finish line" for this event to be over.
I am expecting the 2081 fib to be where the corrective move ends. We will see - many may get FOMO and move us to 2100.
Notice the price path never hits the medial line on this pitchfork. That is my seasonal pessimism.
Keep in mind the key pivot here (P4) is by no means confirmed - this is all based on an assumption. If we open / hold lower then this plan gets thrown out.
I will trade this with some new ITM put sales on SPY and selling some UVXY puts that I already have in inventory when the key fibs are hit. I will also buy some OTM UVXY calls when those fibs are hit. My hedge are puts on USO and some drillers that I bought last Thursday - if #brexit translates into immediate recession (I don't think it does) that impact will be signalled with a decisive Oil top. Oil has already looked toppish so it was a good hedge - notice that WTI lost a greater percentage than SPX500 on Friday.
I am also researching how to trade oil volatility and may hit that topic in a separate post.
