Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market XIV Starting To Crack And The VIX Ends Its Streak

Stock-Markets / Volatility Jul 28, 2017 - 10:11 AM GMT

By: Submissions

Stock-Markets

Mike Golembesky: Recent Price Action

This week the XIV continued to grind higher finally reaching a high of 96.98 on Wednesday afternoon. This high was followed by a very small move to the downside late in the day on Wednesday.

Thursday morning saw a slight recovery but by the noon lunch hour, the XIV started showing signs of weakness. By 12:30 the XIV began to move sharply lower finally bottoming at the 89.28 level, some 7.5% off of the high of the day.


This move was rather short lived, however, and the XIV did manage to recover most of the losses incurred during session finally closing out the day down just 1.5%.

Anecdotal and Other Sentiment Indications

Last week I discussed some of the records that the CBOE Volatility Index (VIX) had set in 2017. I also discussed the VXO symbol which is a more accurate way to compare the current VIX to pre-2003 levels.

One of the most impressive records that the VIX had set in 2017 was the total number of days that it had closed under the 10 level. At the time of last week’s writing, this number stood at a total of thirteen, with six of those coming in the six consecutive trading sessions leading into last Thursday’s close.

This streak continued into this week and did not end until today, leaving the VIX with ten consecutive under 10 closes. This brought the total number this year to seventeen; this is more than four times all of the previous years combined.

So while the streak was indeed broken on Thursday it wasn't broken by much as by the end of the trading session the VIX had moved all the way back down to the 10.11 level from an 11.50 intraday high. This 10.11 close did, however, give the VIX another under 11 level close bringing this year’s total up to 63.

Equally impressive was what the VXO did this past week as it closed in the 7s for the first time in history last Friday. It followed this up with two additional under 7 closes on Monday and Wednesday of this week, and on Tuesday the VXO closed at an all-time low of 6.32!

Today the VXO hit an intraday high of 9.50 but moved back lower and closed at 8.39, which was still makes the top ten list for all time lowest closing levels.

While the VIX did indeed end its streak of closing under 10, Volatility levels are still very low and have quite a bit of work to do before they are out of the basement.

Price Pattern Sentiment Indications and Upcoming Expectations

In last week’s article, I had noted that the XIV was following a fairly clear impulsive wave pattern up off of the June 30th low. At the time of that writing, the XIV was trading just over the 93.25 level.

I was ideally looking for the XIV to head up towards the mid-90s prior to topping but I was keeping a close eye on the support zone that was indicated in the yellow box on the 20-minute charts.

Although the move down on Thursday was quite sharp it did manage to hold over the upper end of the yellow support box which now sits at the 88.90-86.21 zone. Furthermore, the move down off of Wednesday’s high still counts best as a corrective move.

This leaves the door open to still take the XIV back over the 96.98 high and potentially even over the 100 level prior to making its final larger degree top. The XIV would have to hold the 86.21 level to leave this scenario reasonably probable; I would view a break of that 86.21 level as the initial signal that the XIV has already topped in its larger degree third wave.

Once this does top in this larger degree third wave I expect to see this correct down towards the 60.85 – 44.85 zone prior to bottoming and once again resuming the larger bullish trend moving the XIV higher once again in 2018.

So while the XIV has yet to break, this initial crack has already provided two very nice long Volatility trades, of which, profits have been banked and costs have been removed.

So while I am now off of the sidelines and into the game I am still left with plenty of dry powder and am patiently waiting for the next setup to come.

See charts illustrating the wave counts on the XIV.

Mike Golembesky is a widely followed Elliott Wave technical analyst, covering U.S. Indices, Volatility Instruments, and Forex on ElliottWaveTrader.net (www.elliottwavetrader.net), a live Trading Room featuring intraday market analysis (including emini S&P 500, metals, oil, USD & VXX), interactive member-analyst forum, and detailed library of Elliott Wave education.

© 2017 Copyright Mike Golembesky- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 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