I watched UVXY for a while this morning, and it was holding up. It should wither all this next week as capitulation sets in. The lower Bollinger on the daily ^VIX is down around 11. We will look for a collapse in ^VIX by late next week that sets us up for a "buy" signal in volatility.
So this is how it's going to end? Think we can make 1641 by the end of next week? Now that we have gapped over 1600, I don't see why not. Let's see if it makes a nice E-D shape.
The problem is that we are stretching the rubber band too far north here, increasing the damage (and sweet opportunity) of the coming crash. If we can make 1641 (and I sincerely hope we do now), then a move to cross the great Jaws of Death megaphone, to reach the bottom of the megaphone, on the timeline of the 2008 cycle, means that the 2013-2014 would be roughly 16% greater in magnitude than 2007-2009.
As I scribbled back in January, 2007-2009 was 16% larger than the 2000-2002 cycle.
With this blow-off top in-progress, we are setting up to do it again. Or worse, who knows.
I'm an optimist in even thinking that the megaphone bottom holds down at SPX 580.
|SPX 05-03 a.m.|