Wednesday, January 16, 2013

Charts 01-16: Another week in the wedge

The wedge shape of an ending-diagonal is taking shape, and it looks like the 3rd wave of the move is in.

For wave 4, a pullback to the .382 at 1445 would work, especially if we can get the A and B waves tomorrow, with C on Friday.  C might be the large move that the small change in the McClellan yesterday would produce.

SPX 1445 would also give us the slight W1/W4 overlap we want to see on an ending-diagonal triangle pattern, indicating an underlying weakness in the overall move.

The upper Bollinger on the weekly SPX is 1483 -- we'll watch it carefully next week, as it is a good target for a topping candle here.

SPX 01-16
A drop into January opex, followed by a rally to new highs would also bring in the lower Bollinger for the VIX, setting up a VIX buy signal late next week where we can close a candle down in the 12s, outside the lower Bollinger.  That would be a useful indicator here, a nice-to-have.

VIX 1Y daily

3 comments:

bmihogh said...

Well, I think some of your previous month-based charts were better, the weekly Bollinger is simply too weak to initiate/predict such moves.

And IMHO it won't be so clean... It's always a dirty work at the end...

Christian Gustafson said...

Just look at the /ES fly this morning, we're set to crush 1474 at the open.

If they can't get it done during RTH, there is always the overnight futures.

Christian Gustafson said...

LOL the other option with this VIX chart is that we go chase that bottom Bollinger down in the 9s ...

UVXY getting destroyed again this morning, what a disaster for trapped longs.