Panic Bottom - It's All In The Chart
SPX Monitoring purposes; Long SPX on 3/25/22 at 4543.06.
Monitoring purposes GOLD: Long GDX on 10/9/20 at 40.78.
Long Term SPX monitor purposes; Neutral
We updated this chart from yesterday. We said yesterday, “The top window is the 2 day (Rate of Change) for the VIX; readings above 25 on this indicator (current reading is 26) suggests a low is near; happed 8 times since last May with one failure which works out to 88% success rate. The pattern forming on SPX could be a Head and Shoulders bottom where the Right Shoulder is completing now. This potential Head and Shoulders bottom has an upside target to 5150 which would be a new high. Don’t have it shown but NYSE Summation index needs to see +1000 range near mid May for a bull market signal (on a previous report) for 2022 other wise sideways market at best this year.” Added to above, Today’s light volume test of Monday’s low is a bullish sign suggesting bottom is forming.
VIX measures the fear in a market and the VVIX is the VIX of the VIX. So the VIX/VVIX ratio is a good indicator that can define panic and panic only forms at bottoms in the market. The acceleration of the VIX/VVIX ratio helps to pin point where all the panic is occurring. The bottom window is the “Rate of Change” (ROC) of the VIX/VVIX ratio and high readings above +10 suggests panic (high came in yesterday +15). Next window up is the Percent B. The percent B shows when it above its upper Bollinger Band (>1) or below its lower Bollinger band (<0). Percent B of the VIX/VVIX reached above +1 a couple of days ago suggesting VIX/VVIX ratio has gone up to fast and is due to normalize. Top window is RSI for the VIX/VVIX ratio which also measures acceleration and shows excess with readings reach above +70 (current reading is 84). We marked with red lines the times when all three indicator for the VIX/VVIX ratio reached bullish levels. Will this time be different,? Ask for free 2 wk trial. Join us on twitter. @OrdOracle
The top window is the Inflation/Deflation ratio. Last week it closed above its previous 2020 high suggesting a breakout. Right after that high, it tumbled the next four days creating an “Up thrust” suggesting a consolidation is starting. If the Inflation/Deflation ratio starts a consolidation so will the XAU (GDX). As pointed out in yesterday’s report, the pattern that may be forming on XAU is a Head and Shoulders bottom where the Head is the October low. Head and Shoulders pattern have symmetry both in time and price. The Left Shoulder formed over 5 months and suggests the Right Shoulder may take as long and could complete in the October or November timeframe. Still a bull market but sideways action over the next 5 or 6 months is possible.
Signals are provided as general information only and are not investment recommendations. You are responsible for your own investment decisions. Past performance does not guarantee future performance. ...
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