%AB = %CD and, well, that’s all she wrote …XIV

I don’t like to post ‘after the fact’ but I was on some business travel this week and away from my charts.  A while ago I could see the parabolic rise occurring in the XIV (inverse VIX) and made a calculation using log percentage moves * .618.  While the market pulled back (XIV) from this level it took almost the exact percentage moves to complete the pattern.

here’s the link to the post: https://bartscharts.com/2017/09/17/interesting-chart-xiv-inverse-vix-updated-and-updated-again-and-updated-again-2/

did I have ANY idea it was going to thump out of business. absolutely note .. but I did warn that parabolic rises never end well … here’s the chart.

O U C H ….and that’s all she wrote

XLP / $NYA … approaching .382 from all time low

if the XLP/NYA ratio finds support and appears to end an A-B-C correction THEN we ‘should’ see Volatility Spike and correspondingly a nice correction in equities. If this level fails, then we might see some consolidation or a little pullback but nothing that could spook the masses.

it might be noted that … right now we are levels of bullishness as measured by market vane that we haven’t seen since ..yes, you got it the 2007 top.

a plunging liquidating sell-off should, ultimately be bought .. as I still don’t think this run is over but I do believe we are long overdue for a nice pullback.  W/ the options expiration and most mutual funds legally bound NOT to sell and be invested at all times I don’t think we’ll see anything till next week, if at all.

Note the chart below ..

  • XLP/NYA – candles
  • XIV (inverse VIX) blue line
  • NOTE: a most inflections of the XIV (up or down) the ratio either led or gave a heads up that volatility would increase or decrease.
  • Our thesis is the ratio ‘should’ find support on the .382 from the all time low in 2007 and correspondingly cause an uptick in volatility and a market sell off.
  • A CLOSE (WEEKLY) BENEATH THE .382 WILL TARGET A LOWER MEASURED MOVE TARGET. IF THIS HAPPENS EXPECT SOME CONSOLIDATION OR MINOR FITS AND STARTS BUT NOTHING TO KNOCK YOUR SOCKS OFF. WOULD WAIT TO SEE WHAT HAPPENS A LITTLE LOWER IN THE RATIO.

 

Interesting chart … XIV (inverse VIX) UPDATED and UPDATED again and UPDATED again

09/17/2017 – well, as you know, the SELL PATTERN on the NYSE Index got smoked ..NOTE the gap UP RIGHT AT THE PATTERN LEVEL. that’s a failed pattern …

now, the XIV has hit the target zone but I’ve updated it based on the most recent action. It has NOT made a new high and is still in the zone for a SELL XIV or “BUY” Volatility.  Stay tuned ….

If you go the XLP / $NYA chart you can see a little lower on that ratio could push the XIV up and into the next zone for the sell.  All best are off if we daily close above “wrong above here” or, if you want just a little more risk above the hold high on the XIV.

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09/04/2017 –  as you can see by the chart below the XIV is forming a ‘classic’ sell signal.  If you look closely (not labeled here) we can see a 5 wave count down. w/ this rally, we should expect another wave lower.  that’s what ‘should’ happen BUT you never know.

we have:

  • dashed red arrows showing equal rallies completed on Friday
  • we have a PATTERN that shows 86.26-86.88 as completing a the sell PATTERN
  • if we blow thru there then the 91.22 area is next and anything above 94 (daily close?) tells me we are going higher in the XIV

probability, therefore risk control, calls for another sell-off to occur in the XIV and, albeit, soon.

also, note the SAME fractal pattern is present on the $NYSE Index.

Happy Labor Day.

Bart

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07/30/2017 – we are entering August w/ volatility AT THE ALL TIME low – ever.  We also have some pretty cool eclipses coming into play.  No kidding, this eclipse is going to be the first one since the inception of the United States that it only goes all the way across our country.  Some serious energy is going to be hitting the continental US.

that being said, you can see we were looking at 88-90 ish as potential targets for the XIV but also noted the ‘big candle’ warranted caution for a top/resistance.

we plowed thru those two targets and now have a weekly doji sitting around 93.  why did it stop there?

when going to targets I always like to go long term log and also use percentage projections. as you can see if we do a .618ab=cd on the percentage distance it hit the high exactly.

additionally we are also hitting some long term log resistance lines – NOTE I bracketed the gap to come up w/ a zone of resistance.

we have some negative divergence but I really want to keep an eye on that rising dashed green trend line on the RSI …that’s pretty much been running the show…

So, I’m still in the mindset that a correction is coming … mindful to wait for an SRC before jumping in on the LONG VIX or short XIV opportunity.

 


 

07/16/2017 – NEWS FLASH Volatility is historically low (insert sarcasm here) .. as you can below on the first chart the XIV (inverse VIX) has simply CRUSHED any semblance of patterns as it screams to new highs.  Sheesh!  But, the more parabolic it becomes the more likely it will parabolically collapse. I’m not saying the market is going to crash all I’m saying is PARABOLIC take off’s NEVER end well. So, ride it while you can …

Below, calling out a very nice 3 drive to a top w/ price and time symmetry and, additionally, the XIV is smacking into 1.618/1.68179 projections from the date of inception.  Man, if it smacks into this level and keeps rolling it’s going to be Space-X rocket.

NOTE: if your thinking the VIX is going to spike (XIV to go down) watch out – the candle going into this level is pretty large and bullish …

this chart below is the WEEKLY blown up to capture the most recent price action:

____________________________________________________________________________________________page_17-02-09_19-42-13

Interesting chart … XIV (inverse VIX) UPDATED and UPDATED again and UPDATED again

09/04/2017 –  as you can see by the chart below the XIV is forming a ‘classic’ sell signal.  If you look closely (not labeled here) we can see a 5 wave count down. w/ this rally, we should expect another wave lower.  that’s what ‘should’ happen BUT you never know.

we have:

  • dashed red arrows showing equal rallies completed on Friday
  • we have a PATTERN that shows 86.26-86.88 as completing a the sell PATTERN
  • if we blow thru there then the 91.22 area is next and anything above 94 (daily close?) tells me we are going higher in the XIV

probability, therefore risk control, calls for another sell-off to occur in the XIV and, albeit, soon.

also, note the SAME fractal pattern is present on the $NYSE Index.

Happy Labor Day.

Bart

—————————————————————————————————————————————————————–

07/30/2017 – we are entering August w/ volatility AT THE ALL TIME low – ever.  We also have some pretty cool eclipses coming into play.  No kidding, this eclipse is going to be the first one since the inception of the United States that it only goes all the way across our country.  Some serious energy is going to be hitting the continental US.

that being said, you can see we were looking at 88-90 ish as potential targets for the XIV but also noted the ‘big candle’ warranted caution for a top/resistance.

we plowed thru those two targets and now have a weekly doji sitting around 93.  why did it stop there?

when going to targets I always like to go long term log and also use percentage projections. as you can see if we do a .618ab=cd on the percentage distance it hit the high exactly.

additionally we are also hitting some long term log resistance lines – NOTE I bracketed the gap to come up w/ a zone of resistance.

we have some negative divergence but I really want to keep an eye on that rising dashed green trend line on the RSI …that’s pretty much been running the show…

So, I’m still in the mindset that a correction is coming … mindful to wait for an SRC before jumping in on the LONG VIX or short XIV opportunity.

 


 

07/16/2017 – NEWS FLASH Volatility is historically low (insert sarcasm here) .. as you can below on the first chart the XIV (inverse VIX) has simply CRUSHED any semblance of patterns as it screams to new highs.  Sheesh!  But, the more parabolic it becomes the more likely it will parabolically collapse. I’m not saying the market is going to crash all I’m saying is PARABOLIC take off’s NEVER end well. So, ride it while you can …

Below, calling out a very nice 3 drive to a top w/ price and time symmetry and, additionally, the XIV is smacking into 1.618/1.68179 projections from the date of inception.  Man, if it smacks into this level and keeps rolling it’s going to be Space-X rocket.

NOTE: if your thinking the VIX is going to spike (XIV to go down) watch out – the candle going into this level is pretty large and bullish …

this chart below is the WEEKLY blown up to capture the most recent price action:

____________________________________________________________________________________________page_17-02-09_19-42-13

Interesting chart … XIV (inverse VIX) UPDATED and UPDATED again

07/30/2017 – we are entering August w/ volatility AT THE ALL TIME low – ever.  We also have some pretty cool eclipses coming into play.  No kidding, this eclipse is going to be the first one since the inception of the United States that it only goes all the way across our country.  Some serious energy is going to be hitting the continental US.

that being said, you can see we were looking at 88-90 ish as potential targets for the XIV but also noted the ‘big candle’ warranted caution for a top/resistance.

we plowed thru those two targets and now have a weekly doji sitting around 93.  why did it stop there?

when going to targets I always like to go long term log and also use percentage projections. as you can see if we do a .618ab=cd on the percentage distance it hit the high exactly.

additionally we are also hitting some long term log resistance lines – NOTE I bracketed the gap to come up w/ a zone of resistance.

we have some negative divergence but I really want to keep an eye on that rising dashed green trend line on the RSI …that’s pretty much been running the show…

So, I’m still in the mindset that a correction is coming … mindful to wait for an SRC before jumping in on the LONG VIX or short XIV opportunity.

 


 

07/16/2017 – NEWS FLASH Volatility is historically low (insert sarcasm here) .. as you can below on the first chart the XIV (inverse VIX) has simply CRUSHED any semblance of patterns as it screams to new highs.  Sheesh!  But, the more parabolic it becomes the more likely it will parabolically collapse. I’m not saying the market is going to crash all I’m saying is PARABOLIC take off’s NEVER end well. So, ride it while you can …

Below, calling out a very nice 3 drive to a top w/ price and time symmetry and, additionally, the XIV is smacking into 1.618/1.68179 projections from the date of inception.  Man, if it smacks into this level and keeps rolling it’s going to be Space-X rocket.

NOTE: if your thinking the VIX is going to spike (XIV to go down) watch out – the candle going into this level is pretty large and bullish …

this chart below is the WEEKLY blown up to capture the most recent price action:

____________________________________________________________________________________________page_17-02-09_19-42-13

Interesting chart … XIV (inverse VIX) UPDATED

07/16/2017 – NEWS FLASH Volatility is historically low (insert sarcasm here) .. as you can below on the first chart the XIV (inverse VIX) has simply CRUSHED any semblance of patterns as it screams to new highs.  Sheesh!  But, the more parabolic it becomes the more likely it will parabolically collapse. I’m not saying the market is going to crash all I’m saying is PARABOLIC take off’s NEVER end well. So, ride it while you can …

Below, calling out a very nice 3 drive to a top w/ price and time symmetry and, additionally, the XIV is smacking into 1.618/1.68179 projections from the date of inception.  Man, if it smacks into this level and keeps rolling it’s going to be Space-X rocket.

NOTE: if your thinking the VIX is going to spike (XIV to go down) watch out – the candle going into this level is pretty large and bullish …

this chart below is the WEEKLY blown up to capture the most recent price action:

____________________________________________________________________________________________page_17-02-09_19-42-13

Interesting chart … XIV (inverse VIX) UPDATED

03/25/2017 – well looks like it went up into the zone discussed below.  I’ve labeled the extension targets as 1.732 (square root of 3), 1.68179 (note the closes) a musical note and the projection was 1.27AB = CD. 1.27 is the square root of 1.618.

as you can see, it sold off but DID NOT give a weekly signal reversal so continue to monitor. Often times, it “likes” to go back to the level of the first failure around 60 as shown.

good weekend to you ..

B

 

 

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page_17-02-09_19-42-13

this is ‘kind of important’ … I think… and you might want to read to the bottom

everyone is talking about low volatility .. trust me, I hear ya.

but man, do I love me some ratio’s …here’s the deal, put one security over another and guess what. If it’s going HIGHER then the numerator is stronger and if it’s going LOWER the denominator is stronger. BOOM …

so, a couple weeks ago I blogged about my ‘favorite’ ratio finding support .. the XLP/NYA.  It’s a very simple observation … XLP is staples and it’s defensive. the ‘big boys’ shift their focus on staples in time of RISK OFF. yes, i said it .. i know the market will NEVER go down and its always straight up but … well, just take a look

  1.  BLUE LINE is XIV which is an INVERSE of the VIX.  Basically when this puppy goes up volatility goes DOWN and when it goes down volatility goes UP.  NOTE – it’s a rocket ship right now, corresponding to very very low volatility.  that’s the blue line
  2. the candles are my favorite ratio .. the XLP / $NYA.  when the ratio goes UP the XLP is stronger and the thesis is this is defensive rotation by the big boys – aka Goldman Sachs (LOL) and the institutions.
  3. note, I put them on top of each other to show a pretty important correlation
    1. note the blue rectangles.
      1. those represent inflection points in the XIV and the ratio
      2. NOTE: when the XLP / $NYA bottoms, the XIV goes down (volatility increases) and when the XLP/$NYA tops, volatility – as measured by the XIV – goes down the tubes.

So, it’s official:

  • the market is NEVER going down as measured by money managers sentiment index the BULLISH SENTIMENT IS AT A 30 YEAR extreme.
  • the XIV is basically parabolic w/ the ratio having bottomed …

a simple observation can be made – the XIV is about to decline which should to lead to a volatility increase.  now to soon ….

page_17-02-09_19-58-41

also … well, the Nixon Inauguration of 1/20/1973 was about 2300 weeks ago .. current S&P price, take a peak.  the market topped in/around that inauguration.

here’s what the XIV and the S&P look like together …

page_17-02-09_20-16-18

the kind of look the same, don’t they ….?

just typing an observation – the market will  never go down.

make it real – B