I told you last week:
"it appears any upside will be limited and possibly we see a slight downside bias by week's end."
We saw substantial moves by mid week, but gave a portion back after that. The indexes were up less that 1% for the week As I told you - limited upside but Downside bias by week's end.
We have the 4.5 month (20 week), 10 week, and 5 week cycles down this week. I expect these 3 cycles to prevail as the 9 month cycle see a mid cycle dip. So a trade may be to trim your long positions (I will play an inverted index ETF for a short term trade - (looking for a 2-3% gain).
are we still going to have a downtrend by end of March for the vix or is this it for mid march?
ReplyDeleteT...S.... Usually the 9 month cycle is divided into 2x4.5 month cycles. If you look back at last year you see the mid-cycle dip at late June. That is what I am expecting over the next week (+/- 2 days) - a 9 month mid-cycle dip. GL
ReplyDeleteI enjoy reading your work. The VIX cycle you depicted has a spike it will make (End of March). Are you ignoring it or you just don't see a SPX selloff happening then?
DeleteDon - consider possibilities, there are no guarantees in the market. There is always multiple possible out comes, so identify them and watch to discern the more likely market outcome and trade it.
ReplyDeleteMy primary work is cycles, but when I see other potential market indicators I try and inform you of that. Some analysts swear by the VIX.
Made about 2 1/4% on R2K inverse ETF as detailed as my trade above.
ReplyDeleteGreat call! did you cover your short/do you believe a near-term bottom is in?
ReplyDeleteSold the inverse ETF to harvest gain. No shorting in this account - it is an IRA account. Short term bottom should be in, so a small long ETF trade like IWM (R2K index) looks OK for next 6-7 days (the blog is called SWING TRADE Cycles after all.
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