Both the VIX and volatility ETFs like UVXY rose to highs this week almost identical to those reached in mid-December, yet the damage on the indices was far, far worse. I think this is a serious divergence worth noting.
Much of the December rise was hedging going into the FOMC meeting as well. But there was real damage done this week, but as drips, not impulsive breakdowns.
If this decline fails, then let's look at what happened the last time one of these failed -- we rallied to the 1.618 fib extension of the drop. A similar reversal from here would target an astounding 2182 SPX, right at resistance from a trendline from the highs in mid-2015 (the year).
The weekly and daily Bollinger Bands should head upwards as well, like they did on the reversal off the 1871 low, only this time we are close enough actually to reach them.
And get our true top, with bad breadth and Hindenburg Omens and stupid blow-off moves on specific tickers. It's going to be just grand.
 |
| SPX case for 2182 top |
Yeah, I know it seems crazy after a week like this. We'll know soon enough.
GLTA, have a good weekend.
67 comments:
Keep it civil, you mooks.
scott, I'm glad you've got the hyperlink problem solved. We're glad to have you around and welcome your input.
I'll give you this, at least you're a true contrarian. I'd love to see a bit more downside Monday, for short term trade. Or maybe we're just trapped in our NARRATIVE! Maybe we need to go sit in the corner, assume the lotus position and chant ohmmmmmmm.
"Keep it civil, you mooks." OK, I'm done.
I think everything at the moment depends on the One Thing that Really Matters ... USDJPY
"Mooks" is from "Mean Streets" and as Scorsese, is always welcome here.
CG, my long standing targets have been 2165 and 2220....fits with your scenario!
Only problem is the Transports have now broken thru 2015 and 2014 lows....and are close to Oct 2013 lows....which tells me a top is most likely in!
....your thoughts?
^DJT peaked in 2014 and is tied to the imploding oil complex. It's certainly not in sync with large caps and tech and the rest.
I thought its primary purpose was how it behaved with respect to the Dow Industrials. So while we would expect a new high on the ^DJI, a lower high on the Transports would not confirm it, so things could then go helter-skelter.
IMO, the really scary news out this week wasn't China devaluation, but the IPO proposed for Aramco. I presume this means that Ghawar is mostly seawater by now, so this could portend some real problems for the growth and the progress and the animal spirits.
The *real* $20 crude oil still coming out of that hole is holding up the entire world economic superstructure, you know.
oh dare I say it again - the "fear" correlation is not causative the way you think it is.
as for "impulsive", the close sure seemed so today, failed rally after failed rally as each sign of strength was sold.
I fear as a cartographer you have started over and over with the destination rather than the point of embarkation!
I ask you CG, what do you think my profit is on the shorts I've had the whole time you and others have been WARNING OF NEW HIGHS? Warning that there was no fear and that I should be careful. lol
On November 1st I posted that the rally was over and that the bear market was in force. I got ridiculed, YES I SAY, lol, RIDICULED. I was 80% short with 25% 2x inverse dow as of Oct 30th.
I'll tell you my returns: 8.43% in a little more than two months.
Even if by some Jedi miracle you turn out to be right about NEW HIGHS, SO WHAT! Your predictions have been horribly USELESS TO A TRADER working toward profits.
At what point do you decide your analysis might be a little flawed? It certainly is not a trading advantage.
SEE BELOW! On Nov 27th you called all shorts "dumb" and that they would have to be crushed before a real decline could occur.
I was short then and I STAYED SHORT while you rewrote your script over and over and over. May I always BE SO DUMB! HA!
Any time I said something was going to happen based on my data, IT HAPPENED within a day or two. When my data tells me to cover my shorts, I WILL.
Today, however, my data told me to go more aggressive. I went 90% short and increased 2x leverage on the DOW to 60%.
For goodness sake give people useful tools or admit that this blog is for entertainment and distraction (destruction?) only! lol
CG, Nov 27th:
Dumb shorts must be liquidated before the real selloff can begin in earnest. They must sit and watch as the market crumbles before their eyes.
The strong do what they will; the weak suffer what they must.
November 27, 2015 at 11:56 AM
DUMB SHORTS INDEED! WOW!
on Nov 20th you said:
I would not want to be holding short into a holiday week.
November 20, 2015 at 1:02 PM
Wrong again!
I know Hollywood can use writers who can rework the narrative on a moments notice...
If the SPX does reach 2182, I look forward to hearing T. Berry's insightful commentary.
Interesting contrarian idea, but I'm afraid it doesn't really hold truth. VIX has been jumping up compared to S&P dripping down. So "fear" as measured by the VIX does not turn out like you said.
Since about 1 month ago (30/11 -> 8/1): S&P -8.06%, VIX + 78.64%.
VIX went a little nuts around the FOMC meeting yes, but than retraced back to S&P (Dec 23: S&P -1.24%, VIX: +2.98%).
Since then it's VIX going exponential and S&P dripping down.
So I think you're wrong on this call, and we have a lot more downside.
All depends of course on QE4, ZIRP, the RMB, etc. But those will only come into play around 1700 I think.
I can't recall any pattern in Elliott which fits that 'ABCDE' and in the canon.
It might be a bullish 1-2, but in that case the target would be far higher than yours.
Also, second waves tends to find support on some trend averages - but for this, there isn't any at hand.
IMHO the most bullish (and still realistic) scenario is a downward C of a fourth wave.
But then some more fall is expected (at least, a series of closing iv-v waves) before it stops and turns upward.
Steven - I have the same question to you as I have been putting to CG. If your analysis of the VIX is correct then why did it keep you and him out of a trade that could have profited you both around 10% in a little over 2 months? I take that sort of trade all the time based on the indicators, charts and data I've been posting.
In fact that trade is still on and I will keep you updated as to what may increasing profits are and when I finally cover.! lol
the VIX follows asset prices as often as it leads. THERE IS NO CAUSITIVE RELATIONSHIP. Besides that there is no particular correlation OF MAGNITUDE that you can use as a TRADING predicate.
In fact it is asset price BOTTOMS that vix highs correlate most frequently with, say in the 35 to 50 range.
A macd setting of 7,4,8 on the vix catches the foreshadowing because of the lags. That is one way I am able to front run falls like this last one while everyone else is waiting for the VIX to confirm...
There a are couple of ways to use the vix FOR TRADING and yours and CG's methods are not among them:
http://stockcharts.com/h-sc/ui?s=%24VIX&p=D&st=2015-07-05&en=2016-01-06&id=p55923231325&a=428878359
recently the basing of the VIX along a VERY LONG TERM support line and the unique macd setting have given excellent support to aggressive short positions.
enjoy the downdraft as the VIX belies the move. LOL
scott,
serious question: what is your next price level for spx and by when ?
thx
TW - I deal more in time cycles rather than in price targets.
My 1950 call the other day was based on the NYUD Volume Oscillator and how a bearish time cycle ended very close to the 75 day cycle high. The lower Keltner on a unique setting gave 1950 as the minimum low price of the move.
Now, there is also a Money Flow cycle that indicates that this down trend should have a short term tradable bottom around February 3rd. So the downdraft isn't over.
There is major support at 1880ish so lets take that as the next rung down on the ladder?
http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&st=2015-01-25&en=2016-01-09&id=p22866297692&a=406333442
http://stockcharts.com/h-sc/ui?s=%24NYUD&p=D&st=2015-08-06&en=today&id=p13101724459&a=367854604
note that the Vol Osc (NYUD macd 19,39,1) is still heading down. There is an understanding when using the Vol Osc that for a bottom to occur there has to be a cash build up shown by a decline blow zero and that the cash build up phase is equal to the following rally.
In bear markets a bearish cycle is created when the Osc goes sideways without a downward sloping cash build up.
This guy has archived a lot of Terry Laundry's work on the NYUD Vol Osc and what he called The Law of Matched Time. Terry died in July of 2012.
http://stock-market-observations.com/category/1-t-theory/index/
CG,
Sometimes your predictions make my head hurt. Team Winning made good point about the Transports not confirming and in fact falling below the August '15 lows. Well the Russell 2000 has fallen below the August '15 lows as well. Those types of divergences don't really seem to agree with your ideas of new ATHs. Again I can see a rally attempt to the 200 day ma but, not to ATHs.
I don't see it from either a technical standpoint or see any set of potential catalysts at this point. The commodity complex (i.e. the CRB) is at multi decade lows and well below the March 2009 lows. So you won't get any help from mining/energy complex. Emerging Markets are in deep trouble right now. Junk bond yield spreads are blowing out. The yield spread is starting to average over the key 7% level when real trouble starts to bleed over from bond markets to stock markets. The ISM manufacturing index is below 50 and the number 48.2 reported for Dec '15 was below the consensus number of 49.2. Also, the Fed seems to be determined to continue to raise interest rates in the middle of this mess.
I can see a sizeable oversold bounce in conditions like these. However, I'm totally confused why you are calling for new ATHs. I'll need to see more reasoning than just being contrarian for contrarian's sake. CG you seem really far out on a limb and I'm afraid the limb might break on you.
Everybody is too fast with conclusions without the actual context defined. Bear market? C'mon, it's matter of tf.
On quarterly, it's still just a bite on a steel-solid bull market.
http://keptarhely.eu/view.php?file=20160110v00hm780l.png
(There is a similarity marked on the chart which, I think, has high enough possibility.)
On monthly and weekly, it's sideways. Neutral.
On daily - now, that's clean bear.
It's not a problem if one expecting more highs. Based on the long term charts, more highs are quite likely.
It's also not a problem if one expects more lows. Based on the daily charts, more lows are quite likely.
Between the two, based on the weekly and monthly charts we have a range.
Mix all the TFs together and we have a brawl.
That's all I think.
Bull/Bear or maybe just the end of the fools zero sum fantasies? lol
None of these charts look Neutral by ANY METRIC.
http://stockcharts.com/h-sc/ui?s=%24NYA&p=W&st=2012-11-22&en=today&id=p89603520447&a=429428877
massive HS pattern triggered with primary target as 8500 - loss from Fridays close of 11%. Loss from ATH of 24.5%.
the NYA is already down 15.5% from its all time high! Neutral indeed! sideways? WTF? lol
http://stockcharts.com/h-sc/ui?s=%24NYSI&p=D&st=2015-06-01&en=2016-01-09&id=p49284764443&a=429597682 a primary long term Bull/Bear indicator...
http://stockcharts.com/h-sc/ui?s=%24SPX&p=M&yr=20&mn=1&dy=0&id=p95413168112&a=428291868
http://stockcharts.com/h-sc/ui?s=%24XJY&p=D&st=2015-07-17&en=today&id=p44459562394&a=438980213
http://stockcharts.com/h-sc/ui?s=%24SPX%3AUUP&p=D&st=2014-09-13&en=today&id=p76127751731&a=436944126
http://stockcharts.com/h-sc/ui?s=%24SPX&p=W&st=2007-07-20&en=today&id=p03653378071&a=433095328
http://stockcharts.com/h-sc/ui?s=%24NYA&p=M&yr=20&mn=0&dy=0&id=p89499902460&a=429584544
http://stockcharts.com/h-sc/ui?s=%24INDU&p=M&yr=20&mn=1&dy=0&id=p18103628665
http://stockcharts.com/h-sc/ui?s=IWM&p=M&yr=14&mn=1&dy=0&id=p00605924471
http://stockcharts.com/h-sc/ui?s=%24MID&p=M&yr=20&mn=1&dy=0&id=p94455749977
http://stockcharts.com/h-sc/ui?s=%24TRAN&p=M&yr=20&mn=1&dy=0&id=p49809830369 DRAMATIC!
stay trapped in your narratives and become the bullseye for the zero sum game!
"stay trapped in your narratives and become the bullseye for the zero sum game!" Will do Scooter!
so the futures have already hit 1893
NEW HIGHS!
Big gaps left overhead in the SPX chart; highest one from 4 January up at 2044.
We need to see the VIX close back inside its Bollinger Bands today for a decent buy signal on the indexes. McHugh is a big fan of this indicator.
Was last week a policy experiment by the PBOC to see what would come of a little taste of devaluation? They tried it out and then pulled back last night.
IMO what matters is when the devaluation is a forced hand, something along the lines of this. Do the contracts from November's turmoil roll in February?
Copper just broke 2 dollars. First time since 09?
that's the spirit CG! Never let your lying eyes be fooled by your heart-mind!
never give up! New Highs as each rally is sold.
NEW HIGHS! as the Zeros in the Zero sum game are distributed at the TOP.
NEW HIGHS! as every straw you've grabbed at has folded in your hands!
NEW HIGHS!
What number is todays rewrite of the multi-moth narrative? I've lost count. Man it feels like a raw cut of The Lord of the Rings movies. lol
If you keep doing what you're doing, you'll keep getting what you got! Shift gears already!
CG - McHugh does NOT share your views about McHugh...lol
but don't let that stop you!
http://www.safehaven.com/article/40107/the-stock-markets-worst-yearly-first-week-ever
quote: What is missing is any evidence of a Bullish divergence this weekend, so it is quite likely stocks have further to drop.
VIX BB Buy signal failures since this decline began - Enough said!
http://stockcharts.com/h-sc/ui?s=%24VIX&p=D&st=2015-09-16&en=2016-01-11&id=p55923231325&a=428878359
Back to the hole for me. I'll post when I cover my shorts.
Ohhhh where ooohhhh where is T.Berry to tell us how Mother Yellen always does what's best for her little chicks. OOOOOhhh where ohhhhhh where is TBerry to speaks of the fruits and bounty of this ever lasting Bull market. OOOOhhh where ooohhh where is TBerry to reinforce that this is merely just a good opportunity to buy the dip.
Where for ought thou TBerry ???????????
Morgan Stanley says oil is headed to 20. Bullish?
UVXY making my point for me today. It was almost reluctant to rally -- only spiking toward the end of its run -- it's only impulsive on the way down.
27% drop in 2.5 hours of trading time.
There are plenty of beaten-down stocks out there that, collectively, can take the indices to new and final (?) highs.
I still think USDJPY is the most important chart.
i.e. large-caps can still make new highs IF the Yen can manage to make new lows. Carry-trade for the win.
bicicleta - thanks for your unsolicited concern but my shorts are just fine thank you.
I told you all I'd post when I cover my shorts and I will.
It is amazing how many times I've been urged caution and given serious warnings from people WHO ARN'T making any money in this market! lol and WOW!
What we are seeing today is simply the efficient distribution of ZEROS to the maximum number of IDIOTS who don't know that this video game is ZERO SUM.
enjoy - my aggressive additions to my shorts Monday are going to be in the money real soon. Even as of now I AM STILL UP ABOUT 7% on my overall shorts in less than 6 weeks, so I say...
WTF! keep your warnings off my profits! LOL! I say F--K oil. I've posted numerous methods for staying in right trades and EVERYONE just keeps rolling in tired narratives a PROUST DOG in its vomit.
So be it! WARNING! Making money can be hazardous to your narrative (self) consciousness!
Finally someone acknowledging the oil/stock relationship. Stocks LOVE stable oil prices, too far/too fast either way and stocks throw a fit! My best guess is that oil is about to scream higher, since everyone is short crude/long dollar. THAT is when the real fun begins.
so tell me CG did UVXY tell you the bottom would fall out of this rally today? was there a causative signal or did you just get another lesson in how not to analyze volatility?
if you keep doing what you've done, you'll get what you got.
Proust's dog just cant help himself!
CG. Getting awful tired of Scott. Beyond obnoxious. Don't mind differing opinions, but he either needs his ass kicked or shouldn't be here.
ruff times
At least Scott has been correct in his forecasts.
You can be obnoxious when uou are correct.
IMO the most ominous single piece of data in all of this is the MONTHLY SPX Bollinger.
We touched it on the drop to 1901 SPX. If you look @ a long-term chart, a touch of this lower BB cemented the tops for 2000 and 2008.
The short-term tape has a possible inverse H&S off a 1950 neckline, that would target 1999 SPX if we can manage to make it back up there.
thanks Sarah - I'm not being obnoxious - I get sick of people who don't trade or don't trade successfully telling me what correlations are going to shit down my throat. It's a joke. The narratives that drive people are conditioned and unexamined. The fundamental inability of people to see what's real should be disturbing to them but they get mad at emotional triggers and the cracks in their myths rather than seeing that their life involves NO DIRECT EXPERIENCE - just completely homogenized stories.
monthly proof of death
http://stockcharts.com/h-sc/ui?s=%24SPX&p=M&yr=20&mn=1&dy=0&id=p95413168112&a=428291868
unique coppock not buying "bottom"
http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&st=2015-07-15&en=today&id=p18793547772&a=435022644
Confidence indicators in the toilet
http://stockcharts.com/h-sc/ui?s=JNK%3ATLT&p=D&st=2015-03-02&en=today&id=p89580513851&a=427439031
http://stockcharts.com/h-sc/ui?s=%24NYSI&p=D&st=2015-06-07&en=2016-01-13&id=p49284764443&a=429597682
this keeps deteriorating
Dow 16358 is where my shorts recover their Friday base. For those who are annoyed by me that is where my positions had gained 8.43% in less than 6 weeks...lol
for all the warnings and angst sent my way, I can close out my shorts anytime here and make 5-8% depending on the day. I am fairly certain the 1880 target shown here a few times is on deck so I am waiting to review at that point.
http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&st=2015-01-25&en=today&id=p64280650851&a=406333442
If it becomes clear that 1880 isn't in the cards then I'll cover.
This isnt rocket science for god's sake but you have to actually SEE whats real.
Bicycle - IF YOU KNOW WHATS GOING ON THEN TRADE YOUR KNOWLEDGE AND POST YOUR TRADES instead of being a little scared Nancy about it! AND for god's sake DONT PRETEND TO KNOW by using me as your strawman.
I have REAL MONEY in play here AND as I said above, regardless of holding short during the "rips" as you call them, I AM IN THE MONEY ON MY TRADES. ARE uuuuuuu?
Do you actually have any trades or any positions or any cash as a position?
Cry the myths out of your eyes and SEE!
Alright, Scott, back to the Yahoo! boards with you.
No one insults Mr. Bicycle around here.
Enjoy your seven per cent. Sans apology, future posts of yours will be deleted.
emotional triggers NOT TRUTH!
I didn't think anyone had the nuts to post real trades.
ADIOS.
Get yer own blog, hero. There is a special today, they are free.
Much better CG. Thank you
Thanks CG - you have run off the only person (Scott) that has been correct on this blog. I've followed the blog for almost two years and Bicycle and yourself have been dead wrong on every prediction - your charts look great - but you have been completely wrong - almost two years worth of being wrong.
It was kinda nice to have a right perspective for a while.
Scott is a total nut job
Sarah...so what. That's not the point. He was an asshole. Simple as that.
I don't think anyone here is complaining about Scott's predictions. He obviously has called recent action quite well. Humility is important when dealing with others, and Scott seems sorely lacking in that dept. Personally I have no interest in esoteric rants, about new philosophy on a stock blog either.
I don't think anyone is complaining about Scott's performance/predictions, which have been quite good of late. Humility is important in dealing with others and Scott is sorely lacking in that dept. His esoteric rants about new age philosophy also aren't useful on a stock blog imho.
Oops, posted twice.
Amen Hugh!
Sarah - CG has been fairly quick to change his mind when the facts change. That is what all smart traders do. 10% drawdown in the S&P is n o t h i n g.
I agree with Sarah's comment. Scott has been ridiculed and still held on his position while providing plenty of charts. So is the rule that CG and gang ridicule others but not the other way around? Every time CG calls for a crazy new high, the market drops hard. It's almost too perfect. Feel bad for die hard fans losing money following his calls.
Side note: Bull markets train the biggest bear to be afraid to short. It's certainly has done its job.
Die hard fans?
Geez, no one should follow my calls. You would have to be nuts. And this is not that sort of place.
I'm just trying to figure out when this thing is finally over. We'll know tomorrow if the support from 1820 through 1871 to 1886 today will hold.
I still don't understand what is going on with the VIX putting in a lower high today, and lower still than the VIX on 12/14 -- 100 handles SPX higher.
Wave counts since the 2134 high? A mess. Since 2116? Looks corrective. Even these big declines only look impulsive if you zoom out to 60 min candles.
20pt gap up at 2042 SPX? Think we'll close that? Or is this how the new post-Fed market behaves, it just drains away?
McHugh has proposed a failed/truncated 5th wave top in his newsletter, which is still very possible. The touch of the lower monthly BB SPX is one thing we DID see at the 2000 and 2007 tops. This is concerning.
"scott" would have been welcome here if he had manners, or if he actually explained what was significant or interesting about the dozens of chart links he put up.
Hi,
When the game goes on big, it's always tricky to follow it in small. This one goes on big, that's for sure. Don't bother with the small TF labels, go for the big ones.
My big chart is like this:
http://keptarhely.eu/view.php?file=20160114v00hjtq1b.png
So, it's just falling through a previously well-played >range<. Right now, it's likely, that the range will be filled once more. Right now it's not likely (just possible) that it'll be broken for real - that's too early to be expected.
Especially because we have two significant fibo lines below the fall: the first at 1800, the second at 1600.
Even if we break 1800, till 1600 it would be just an ideal retrace for a fourth wave!
However. One small thing, what I found quite disturbing.
Here is a small piece of chart with a kind of MA backtests both on price and RSI:
http://keptarhely.eu/view.php?file=20160114v00hrphoi.png
And this one is from the monthly chart:
http://keptarhely.eu/view.php?file=20160114v00hb374.png
It's still >not< confirmed, and at this point any bullish outcome is far more probable, and we are months away to say anything >real< about this, but maybe... maybe it's exactly that fall CG waited for years.
Ps.: I can't see if my comment went through or not... If not, then it's here again: if yes, please jus delete this duplicate...
BPSPX below 30. Capitulation near?
What was with VIX and UVXY this morning?
We broke through a really really important support level, and UVXY only rallied a few percent. It is like the market is crashing in slow-motion, and it can't bring itself to accept that.
There's no violent impulse in any of these breakdowns since the 1/4 open. What do you make of this?
There were nasty headfakes that preceded both the 2000 and 2007 tops.
Does everyone just short the farm at a retrace to 2020 SPX?
CG yes. Look at ITB, the housing etf. 2020 spx would put you right back to the neckline in that fund.
Bryan --
Do you believe that The Top is In?
Off a wave failure / breakaway gap, or are we in a larger W3 down from the 2134 high?
Even Bulkowski's rounded-top pattern resolves itself with a pop to new highs.
All I want is a top worthy of the name ...
CG -
IMHO... The wave that began in September appears have been a nested 5th wave failure. If you count 7/20 as the top of Wave 3, and 11/2 as the top of a wave 3 of one lower degree, then the 12/29 high is a 5th wave failure for the lower degree wave, which in turn, is a 5th wave failure of the higher degree wave. We have been in a Wave 1 down since then. Perhaps we are correcting that wave now.
Oh good, looks like I'm not the only person to be completely puzzled by volatility on this run.
Could you help a noob? What are the implications of a 5th wave failure?
On a 5th wave failure, our count has a 5th wave, but it fails to make a higher high, instead resulting in a violent sell-off.
My post to kick-off the year had us finishing a 5th wave with a new high into the first week or so of the year. Instead, China CNY crisis blew us to new lows.
But.
A 5th wave failure should have stirred up much more FEAR, real panic as the direction shifts and everyone dumps equities like mad.
We didn't see that; hence my skepticism all the way down as to what the hell it all means. New highs are still very possible, IMO.
Here's another ZeroHedge piece that grafts the November 2014 response to "Bullard lows" (1820 SPX) to today's events.
This drop to 1879 did do us a service in breaking the trendline support from 1820 through 1867 and 1871.
The next time we really do drop, preferably with FEAR and PANIC, we may go all the way down to the support trendline that runs from 666 through 1074 SPX for our first bounce.
And that bounce may very well FAIL right at the old support trendline from 1820 through 1867 and 1871, sending us south in a hurry.
Scott's having a hard time today figuring out how the comment moderation feature works.
If you do want to follow Scott's insights, friend him, etc, you can find him here.
It looks like the only thing that can save us now is a serious Yen crisis.
Kuroda says he's out of gas, Japan's credibility is on the line.
What happens if there is a snap crisis of confidence in the JPY, and Kyle Bass's ship comes in?
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