Saturday, January 21, 2012

Market view





Markets were flat on Friday and closed at near 0% still the same as Thursday 19th cycle peek I had.

What was interesting on Friday were the VIX were plunging ,, somehow looks like a capitulation move in the VIX ,, as they moved it down to some VERY interesting levels just beofore close.


I'm right now getting smoked in TVIX as my average is 26-27$ with huge size position ,,, so right now deeply underwater which is bad , but again I know that TVIX is a fast mover so last time it ran big were from 20$ to 45$ in 5 trading days ,, thats more than 100% gains in 5 trading days.

Right now I'm underwater a bit ,, but I remain pretty sure that this is just a bear market rally (POWERFULL one) and we are going to see NEW LOWS for 2012 in the markets....

So I remain heavy short,, painful yes - but again the view of the stock markets is still the same and we did not get above the level from 19th cycle.

So take a look at VIX and see which very interesting spot it saw ,, it was option expiration for Friday ,, so seems like they tried holding markets up until then.

Next week will imo be VERY telling what is going to happend, as dow jones is only a few 100 points from 2011 top , and I dont expect dow jones to make new highs but making a "lower high" this time.

Gold and silver still surging after my multimonth bottom call late December when AGQ was 38.25$ I picked it up ,, right at the bottom ,, now its in the 50's ,, so congrats if you got some long gold and silver. Still think the bottom was in ,, but a pullback in gold and silver might come ,, so buy the dips.

Conclusion: So far markets held down on Friday with my cycle high at 19th January which should be the peek of optimism, so the markets should have topped out and markets should be about to see the bear market commence from here. This fits imo pretty good with where the VIX is standing right now. My bottom call for 2012 in VIX was 20-21 level , however on Friday we got last move below this level to the 18.3 which is VERY interesting spot imo, so I guess they moved the VIX down hard to test a key trendline from the lows in VIX.

2 comments:

  1. Hi Sqwii, Just like you I'm sticking with my bearishness - in fact even more so with last 3 week's "rally". I'm in large size $TZA @ 27 so knee deep underwater. Do you think this will closely follow TVIX's upcoming day to day moves?

    Once again very nice charts and analysis :)

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  2. Finally!

    I'm certain that the VIX bottomed Friday. It has taken time, but the bears will be proven correct.

    The VIX is much lower than in late October. In contrast, SPX is barely higher than the late October high at 1292. This is a very bearish combination with the market hardly advancing in 3 months, and a VIX that has collapsed.

    Complacency is at an extreme. The target for VIX is over 60.

    On Friday I went long VIX futures via TVIX at $20.21 with a large position. This is a trade with $28.80 area being a short term target around Jan 30-31.

    http://cyclicalmarketanalysis.blogspot.com

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