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Testing the previous rebound high, key time, 40% chances of double top, wait.

members only update starts here: http://www.cobrasmarketview.com/2015/01 ... ay-update/

Short SPY 202.74

This incessant need to short equities will end in tears for bears. They must relent. They must turn bullish.

Jeez those futures didn't translate into the cash markets that well.

SPX.. possible minor invs H&S 5m /"W" bottom.. top left.. VIX near possible support.. mind the morning gap..

cletus wrote:This incessant need to short equities will end in tears for bears. They must relent. They must turn bullish.

LMAO

Covered short

Out of Bounds wrote:Covered short

Evidently this is not true. Thought i did bu my order was not where I thought it was.

Still short.

/es showing a tad of weakness… into red trend/diamond edge...

Out of Bounds wrote:Short SPY 202.74

Good call OOB

Closed now

bad start.

The VIX 10 day MA is near 20. So, this about where the bull market gets tested. A steady rise above 20 means we're either heading for an ending move like 1999 or an all out bear like 2007-8. If volatility sharply contracts in the coming days, the bull is still alive. Note that there's still a 50% chance, even when the vix does steadily rise above 20, that the bull market will keep running, but anything gained from that point forward will be unwound in the future.

If low volatility were to end now, it would be one of the shortest low vol cycles in recent times. (In other words, I wouldn't bet on it ending now.)

Some corrections end with a fake out to the downside. It just represents one final buying opportunity.

Example on daily SPY:

November 20th, 2012: first candle after a breakout. Market fell but recovered later. Left a long tail. Market kept rallying in future days.
September 6th, 2013: Again, a correction had just ended and there was a big intraday drop that should have been bought.
August 12th, 2014: Again, a correction just ended. We had broken out. It fell back a little that day. It just was your last buying opp.

SPX.. first support/ VIX first resistance.. hourly candle if it closes here.. bearish looking.. possible expanding yellow triangle/bear flag 60m.. would means new lows.. but VIX weakfish /es near lower red trend

Also a very important point here on volatility. All past low volatility cycles saw the 10 day VIX hit about 10. This one has not, making it either very unusual, or likely to continue until 10 is finally hit.

I bet this goes on until Thursday and then we might bounce for a few months?

cletus wrote:Also a very important point here on volatility. All past low volatility cycles saw the 10 day VIX hit about 10. This one has not, making it either very unusual, or likely to continue until 10 is finally hit.

When something is unusual, I default to price. Price says the correction is over.