VXX
Using Contango / Backwardation channels to predict UVXY pricesUVXY contango is fairly reliable except when sustained high VIX numbers are posting, The ratio of UVXY to VIX reveals contango / backwardation channels that are predictive to the degree that any trend channel is. This is very helpful as a ratio to forcast UVXY relative to the VIX.
Pictured is the current channel with an elipses and "price" tags at the upcoming April 17 close. Heiken Ashi used to more clearly spot significant contango / backwardation pivots. Note that the underlying for UVXY is VXX futures, so the contango / backwardation well known to VXX gets compounded with UVXY.
Is This Weekly Chart Telling Us Something?I am looking at the weekly $VIX chart. Now this pattern catching my eyes. This is a weekly bullish pattern and it's holding the twenty moving average. We might see another week or maybe 2 of consolidation before a breakout imo.
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VXX vs. IWMWith VXX fast rising against the resistance, RSI is approaching short term overbought zone, meanwhile, IWM is sitting right on a support line that has been formed since Nov. 2013. If this support line can hold for today, I expect a IWM rebound early next week. Otherwise this line may become new resistance.
UUP Dollar Bullish Fund Carving Out Inverse Head & Shoulders Based on this pattern triggering on a move over ~21.60 you could expect a measured move to ~22 before hitting resistance. The timing of this breakout seems to be coinciding with market topping action which further strengthens the likelihood of this chart having predictive utility.
This chart taken together with today's breakout in Treasuries (TLT) and over 30% spike in the VIX this tells a tale of risk aversion and flight to safety into bonds, US Dollar and possibly gold.
4 Reasons Why I Believe a Correction is Due1. I measured the distance off the Ichimoku Cloud, just before markets crashed in 2000 & 2008. We are definitely way too above the cloud support right now.
2. Assessing the data after 1994, the JMA2 moving average is currently in the longest uptrend streak ever, which has been running for 729 days. The uptrend is noted by the white line on the candles, and black line is the downtrend.
3. RSI on a monthly chart has faithfully indicated prior to the previous 2 market crashes.
4. Jurik Research's JU_VEL shows the momentum. It is at the highest reading ever since 1994. Momentum sooner or later slows down before gaining again.
There is also a hidden 5th reason behind those dividend indicators. The volume is dropping but the momentum is gaining which suggests an overly optimistic and euphoric market.
Here's a very fascinating read about the Bradly Siderograph and how it applies in 2014:
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VIX index still poised for oversized move higher this summer.Despite briefly dipping below 12, based on this chart interpretation the VIX is still poised for a rather large spike this summer. First trigger would be a move over ~14 then a push through major resistance ~19.50 - 20 would probably see a rapid ramp towards the low 30's.
This would roughly correlate to a 20-30% correction in the SPX.
Watch to see if the VIX can break and close above the 50 sma (currently 14.08) and then the 250 sma (currently 19.35) for confirmation.