EOD: SVXY did hold below original down leg bottom. After hours has snuck above it so we shall have to see if that holds overnight. If it does, we may still have a retest of SVXY bottom and a temporary market pullback with it.
Update 12:21pm EST: 3 waves down to 3807.75 and very slightly smaller 3 waves back up to 3830.5 so far- so anybody's guess but likely correcting to hit the high as anticipated by week ending/next week. A hit on SVXY at 39.58 would constitute an optimal length third wave of a 3-up and could be significant as it statistically remains below the level of the original down leg wave bottom. Daily breadth is very modest currently and dropping on a weekly chart plot.
We are also into the intra-day 'Pi' time increment at 12:45pm for 45 min so could be a move about to occur one way or the other if significant intra-day numbers hit soon. (watching 39.58/39.48 on SVXY and 3834/3833.25 on ES). VIX is also closing in on a potential support zone.
original post:
Still appears to be a disconnect between inverse volatility and ES futures. A cash high in ES may settle it and produce a pullback in the market.
We originally posited the date 2/7/21 as a potential 'Pi' reversal date and wondered if it might be a bottom. Looks like it would more likely be a potential pre-top to occur either this Friday or next Monday as those dates surround the actual calendar 'Pi' date that falls on Sunday.
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Given the negative breath on weekly, a multi-week selloff of 10-20% is imminent. After that I wanted to understand your thought process on what factors are you evaluating for which prices should come back up top again? Are you looking to negative breath on monthly?
ReplyDeleteVarun: 1) Most often VXX needs to make significant new lows for a larger top to ensue. That is not happening currently which so far suggests less than a major top. 2) Also thank you for your previous question which we answer here-. Often there is a lead/lag situation between ES futures/SP-500 cash and SVXY cash. Enumerated targets are calculated extensions that look reasonable for the short-term zones. ES 3900 is most definitely a potential area for the actual pre-top to show up. We are looking at a time window through to next week early, so somewhere between 2/5 and 2/7. That time window was published several weeks ago and looks very realistic currently to begin the final structure that includes a pre-top. SVXY at $45 is the likely target area to be penetrated after the pre-top has completed. Stay tuned as tops can morph.
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