Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19
It’s Not Technology but the Fed That Is Taking Away Jobs - 16th May 19
Learn to Protect your Forex Trading Capital - 16th May 19
Gold Ratio Charts Offer The Keys to the Bull Market - 16th May 19
Is Someone Secretly Smashing the Stock Market at Night? - 16th May 19
Crude Oil Price Fails At Critical Fibonacci Level - 15th May 19
Strong Stock Market Rally Expected - 15th May 19
US China Trade Impasse Threatens US Lithium, Rare Earth Imports - 15th May 19
Gold Mind Reader's Guide to the Global Markets Galaxy: 'Surreal' - 15th May 19
Trade Wars and Other Black Swan Threats to Your Investments - 15th May 19
Our Long-Anticipated Gold Momentum Rally Begins - 15th May 19
Defense Spending Is Recession Proof - Defense Dividend Stocks - 15th May 19
US China Trade Issues Will Drive Market Trends – PART II - 14th May 19
The Exter Inverted Pyramid of Global Liquidity Credit risk, Liquidity and Gold - 14th May 19
Can You Afford To Ignore These Two Flawless Gold Slide Indicators? - 14th May 19
As cryptocurrency wallets become more popular, will cryptocurrencies replace traditional payments? - 14th May 19
How US Debt Will Reach $40 Trillion by 2025 - 14th May 19
Dangers Beyond a Trade War with China - 14th May 19
eBook - Greatest Tool for Trading? - 14th May 19
Classic Pitfalls for Inexperienced Traders - 14th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

VIX Master Cycle Low Means Falling Stock Prices Ahead

Stock-Markets / Stock Markets 2013 Nov 05, 2013 - 02:17 PM GMT

By: Anthony_Cherniawski


For most of the year, I believed that the March 15 low was the low for the year. It may remain the low for 2013, but a possibility exists that it may not be.

Let me explain.

First, the VIX is coming into its Master Cycle “A” turn window. I had surmised that it might have turned on October 18, a very early Master Cycle low (7 months). Today’s impulsive downside action suggests there may be more decline to come, so The next two pivot days are Wednesday, November 6 and Friday, November 8. Considering how quickly Minor Waves 1 and 3 were formed, Minor Wave 5 could be complete on either day. I have changed thr Elliott Wave interpretation to reflect that possibility.

Wednesday would complete 60.1 months from the VIX high on October 24, 2008. (Yes, it topped nearly a month prior to the market low on November 21, 2008.) So that would be my preferred day for the low. Remember, lesser cycles are superseded by greater cycles. 14.45 marks the top of Minor Wave 5 and three of the 5 waves appear to have been already formed on the way to its final low. 10.73 marks the Cycle Bottom, but it appears that VIX may not go that low. I expect Wave X may be exceeded, but it is hard to say whether the March 15 low at 11.05 will be exceeded or not.

The SPX Cycle Top is at 1768.43. A daily reversal pattern is usually formed by the index piercing the Cycle top, then retreating beneath it, after which it cannot close above the Cycle Top again. That is the case so far. You may be wondering why the VIX is still declining as SPX appears to be topping. The answer lies in the fact that this is the 4th longest bull market in history. The bears are simply worn down. Usually the VIX is anticipatory, meaning that it precedes making new highs ahead of the SPX rolling over. VIX measures the cumulative out-of-the-money puts vs. the out-of-the-money calls over the next 60 days. This means virtually no one is hedging the market against a decline. Hedging is an activity that takes place ahead of selling, acting as a protection against a sudden turn in the market.

This is not a good sign, since there will be no time to hedge in a sudden downturn. I just had a telephone call from an investor selling SPY 160.00 and 165.00 puts. He claims that he would sell them all day long, but there are not a lot of takers. Talk about counterparty risk!

Perhaps the market may be waiting for the Twitter IPO. Twitter plans to close the books on the IPO on Tuesday at 12 p.m. EST (1700 GMT), a day earlier than scheduled, because of strong demand, according to two sources with knowledge of the process. The IPO is set to price on Wednesday, with shares to begin trading on the New York Stock Exchange on Thursday. Could this start the market plunge?



Our Investment Advisor Registration is on the Web

We are in the process of updating our website at to have more information on our services. Log on and click on Advisor Registration to get more details.

If you are a client or wish to become one, please make an appointment to discuss our investment strategies by calling Connie or Tony at (517) 699-1554, ext 10 or 11. Or e-mail us at .

Anthony M. Cherniawski, President and CIO

As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals

Disclaimer: The content in this article is written for educational and informational purposes only.  There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

Anthony M. Cherniawski Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules