Best of the Week
Most Popular
1.UK House Prices Momentum Crash Threatens Mini Bear Market 2017 - Nadeem_Walayat
2.Perfect Storm - This Fourth Turning has Over a Decade of Continuous Storms to Come - James_Quinn
3.UK House Prices Momentum Crash Warns of 2017 Bear Market - Video - Nadeem_Walayat
4.Billionaire Investors Backing A Marijuana Boom In 2017 - OilPrice_Com
5.Emerging Markets & Basic Materials Stocks Breaking Out Together - Rambus_Chartology
6.Global Currency Reserve At Risk - Jim_Willie_CB
7.Gold and Silver: Your Stomach Is Probably Wrenching Right Now - The_Gold_Report
8.Warning: The Fed Is Preparing to Crash the Financial System Again - Graham_Summers
9.Basic Materials and Commodities Analysis and Trend Forecasts - Rambus_Chartology
10.Discover Why A Major American Revolution Is Brewing - Harry_Dent
Last 7 days
The Stock Market Guns of August, Trade Set-Up & Removing your Rose Tinted Glasses - 16th Aug 17
Stocks, Bonds, Interest Rates, and Serbia, Camp Kotok 2017 - 16th Aug 17
U.S. Stock Market: Sunrise ... Sunset - 16th Aug 17
The Next Tech Crash Could Delay Your Retirement by a Decade - 15th Aug 17
Gold and Silver Precious Metals Nearing Breakout - 15th Aug 17
North Korea Showdown: Pivotal Market Turning Point - 15th Aug 17
Tech Stocks DOT COM Bubble Do-Over? - 14th Aug 17
Deep State Conspiracy or Chaos - 14th Aug 17
From the Trans-Atlantic Axis and the Trans-Asian Axis - 14th Aug 17
Stock Market Intermediate Correction Underway - 14th Aug 17
The Islamic State Jihadi Pivot to Asia - 13th Aug 17
Potential Pivots Upcoming for Stocks and Gold - 13th Aug 17
North Korean Chinese Proxy vs US Military Empire Trending Towards Nuclear War! - 12th Aug 17
Gold Stocks Coiled Spring - 12th Aug 17
Neil Howe: The Amazon-Walmart Rivalry Will Determine the Future of Retail - 12th Aug 17
How to Alton Towers Half Price Discount Entry 2017 and 2018, Any Time, No Pre-Booking! - 12th Aug 17
Top 3 Technical Trading Tools Part 2: Relative Strength Index (RSI) - 11th Aug 17
What Makes Women Better Investors - 11th Aug 17
Crude Oil Price Precious Metals Link in August - 11th Aug 17
Influencer Marketing Predictions All Businesses Should Take Into Account - 11th Aug 17
Really Bad Ideas - Government Debt Isn’t Actually Debt - 10th Aug 17
Gold Sees Safe Haven Gains On Trump “Fire and Fury” Threat - 9th Aug 17
Why Is The Stock Market Not Trading On Fundamentals Lately? - 9th Aug 17
USD/CAD - Can We Trust This Breakout? - 9th Aug 17
New Monthly Rebate to Help Reduce Your Trading Costs - 9th Aug 17
Stock Market Divergences Are Now Appearing! - 9th Aug 17
Is Inflation an issue or did the Fed Mess Up? - 8th Aug 17
Top 3 Technical Trading Tools Part 1: Japanese Candlesticks - 8th Aug 17
Researchers Find $10 Billion Hidden Treasure In A Dead Volcano - 8th Aug 17
What Happened to Thousands of Sheffield's Street Trees 2017 - Fellings Documentary - 8th Aug 17
Solar, Bubble, Banks, War, and Legal Tender: Five Reasons Why You Should Buy Silver Now - 7th Aug 17
CRASH - If Some People Do It, Nothing Bad Happens, But If Everyone Does It, All Hell Breaks Loose - 7th Aug 17
Gold and Silver : The Battle for Control - 7th Aug 17
Precious Metals Sector is on Major Buy Signal - 7th Aug 17
Stock Market - Has Time Run Out? - 7th Aug 17
Get Ready for an Historic Upside Gold and Silver Run - 7th Aug 17
BOOM! Bitcoin Rockets To New All-Time High As Cryptocurrencies Surge Higher! - 7th Aug 17
U.S. Dollar: This Crash Signals the End - 6th Aug 17
Predicting The Price Of Gold Is A Fool’s Game - 6th Aug 17
Asda Sales Collapse and Profits Crash! UK Retailer Sector Crisis 2017 - 6th Aug 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

Stock Market VIX Cycles Set to Explode in March/April 2017

Stock-Markets / Volatility Feb 09, 2017 - 06:55 PM GMT

By: Chris_Vermeulen

Stock-Markets

My recent analysis of the markets has shown what I believe to be an explosion in market volatility set to starting happening between February 21, 2017 and March 30, 2017.  The historical VIX cycles have been running about 18~22 week intervals for expansion and extreme volatility levels.  The period August 2015 to January 2016 represented roughly 5 months.  The period between January 2016 to June 2016 represented roughly 5 months.  The period between June 2016 to Early November 2016 represented roughly 5 months (just a little short of 5 months in reality).


The period between November 2016 to the next volatility expansion phase, if this cycle continues, should be March/April 2107 at a target date range.

How will this relate to the US major markets?  I currently believe the recent “melt-up” will stay in place until we have some catalyst that will change the direction of the markets.  In other words, the path of least resistance in the US major markets is upward right now – at least till something changes that direction/sentiment. The VIX cycles may be related to some catalyst event or external foreign market event that could change the major market directions – nut only time will tell.

Currently, on the below DIA chart, I can state that my estimates for upside resistance is 210~212 based on historical price action.  The reason I believe these levels will become upside target objectives is based on my understanding of price rotation, expansion and contraction as well as Fibonacci ratios.  The actual number that I believe will be resistance is 211.63 and I believe this level will be reached in March 2017 or early April 2017.

Once this critical resistance level is reached in the DIA, then all bets are off in terms of the price retracement/rotation that may occur.  Given historical price rotation as examples, I would estimate that the DIA could retrace a minimum of 6~8% ($13 to $17).  A moderate price rotation would equate to a move of 10%~13.5% ($21 to $28).  Beyond these expected levels of support, all bets are off in terms of downside potential.  The closest major downside support levels are $178.25, $170.30 and $154.35 – these levels represent a greater than 15% total price retracement and would put us dangerously close to “Bear Market Territory”.

Of course, if the VIX cycles persist as I suspect, a massive increase in volatility will drive other markets into further trending or price rotation as well.  The tech heavy NASDAQ (QQQ) has been mirroring the DIA and my projected top level is 128.15.  Currently, the QQQ is at $126.54 – only $1.65 (or 1.33%) away from my expected peak level.  After these peaks have been reached, I expect the major market to take pause and attempt to resume trending as we move closer to the volatility cycle period I suspect is driving the VIX (March/April 2017).  It is because of this that I’m issuing this warning to my members to be cautious of extended risk or exposed positions as we near the end of February 2017.  I believe the old term, “Beware the ides of March”, may be a harsh reality this year.

As I continue my extended analysis of the US major markets and commodity markets in relation to these VIX cycles, I will post “Part 2” of this article within a day or so.  I wanted to get this out to all my members and associates so they were brought aware of the fact that the markets are beginning a phase of volatility expansion that should not end till near April 1st, 2017.

In short, what does all this mean? Well, it means now is not the time to be adding new long equity position for long term growth. Going forward, its going to be all about active trading and focusing on my Momentum Reversal Method (MRM) and trading just the hot stocks and sectors for quick oversized gains.

On Feb 8th, myself and subscribers closed out our NUGT trade for a 112% profit that we entered December 16th.

This week we got long ERX at $33, and sold half the position 24 hours later for another quick 7.7% profit and there is still a lot of room for bigger gains there.

So, if you are looking for a simple and highly accurate pulse on the market along with timely swing trades I urge you to join my newsletter at www.ActiveTradingPartners.com – STAY TUNED FOR PART II…

Chris Vermeulen

www.TheGoldAndOilGuy.com

Chris Vermeulen is Founder of the popular trading site TheGoldAndOilGuy.com.  There he shares his highly successful, low-risk trading method.  For 7 years Chris has been a leader in teaching others to skillfully trade in gold, oil, and silver in both bull and bear markets.  Subscribers to his service depend on Chris' uniquely consistent investment opportunities that carry exceptionally low risk and high return.

Disclaimer: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Cardiff Energy Corp. In addition, the author owns shares of Cardiff Energy Corp. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.

Chris Vermeulen Archive

© 2005-2017 http://www.MarketOracle.co.uk - 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

Catching a Falling Financial Knife