Medium Term Target Zones Begin

There could be a reaction in this zone coming up as it is the first time the highest degree (from 3/23/20) vector targets are coinciding with the lower degree vectors and the market. Still only early days though- no top worth mentioning quite yet. Potential for a volatility spike that will try to move the market down a tad is possible in the coming sessions. The type of smallish top that is expected at these positive breadth levels may take 5 to 7 non-dramatic sessions to develop. Today will be the 5th session potentially. Behavior that diverges from these expectations will require a review and update as necessary.

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These 4 And 9 Year Charts Are Painting A Picture Worth More Than Any Analysis

11:19am: Breadth remains unimpressive so far today but that can reverse on a dime as buyers are still jumping in anywhere at anytime at least until the spigot starts turning to the 'closed' setting. At this point, closings are short-term and temporary but a reality check can bite at these levels. Buyers who came in early in the leg should be ok for a few more weeks but late-comers may be tested.

Time to step back and recap. Weekly breadth is very obviously getting larger in MACD histogram bars (top chart) and a repeating overall height pattern has emerged. Can it change? Of course it can but we don't see an overwhelming argument for it just yet. Chart two is referring to leveraged inverse volatility derivatives. Weekly VIX has inflated but has not yet reached heights seen in 2009 so it could be argued that more upside in actual volatility is available based on known historical ranges for it.

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Corrective Leg Up May Be Concluding Wave 7

EOD: Still no top. Breadth (daily NYAD) was down 170% while the MACD value is still above zero but the drop today was notable while closing cash on SP-500 was up a little which is starting to create a negative divergence on the market.  If there is any pullback, it will probably be small potentially printing a wave 'iv'- if and when that occurs- there seems to be no hesitation in just buying any move no matter if it's lower or higher- just keep buying in relentlessly.  Reckless trading is the normal until it isn't. Expecting to watch for at least a few more weeks for this leg to show it's intentions.

Original post-

Chart one is current price pattern.

Chart two demonstrates possible 7th wave concluding in this up leg. (note that in a general inverse volatility bullish market, the plots would be inverted with SVXY plotting above the UPRO:SVXY print). Having stated that- UPRO and SVXY may have caught up with each other as far as arriving at the same 'relative' optimism and may well travel upwards together to a conclusion. Tops almost always come when all market participants arrive on the same side of exuberance!

Chart three shows alternate long term potential projection.

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Important Update - New Long Term Pattern Looks Favorite

Some months ago, this analysis was reviewed and mostly discounted as being too simple at this scale and lacking 'real' conventional structure. The last year of analysis and re-analysis trying to fit conventional structures has proved brutal. As a result and using our past forecast model that noted the specific huge moves in volatility that seemed to 'invert' on each a-b-c leg together with a new chart analysis tool we developed because of the structural analysis difficulties that were being experienced, it started to become clear that an extreme of 'up and down' corrective system was emerging from the mess that had some more to run. Hence the below chart is about as best as we might be able to align with our latest predictive analysis -

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Upward Zig Zag

EOD:  Could be in a wave 'iv' but the way everything is bought at any time, let's wait and see. A vector pattern is looking very strange in it's construction and it needs watching very closely for another week or so, It is unusual in it's size. There was a very similar, smaller one just ahead of 2018 top. In this case, it could simply be warning of a decent mid-size correction to come.

Original post:
Medium degree zig-zag corrective legs like the one we now have from March low in 2020 require very deep and complex vector analysis using many more tools than an impulsive leg. Just look at the ES futures chart at the bottom. Bottom line - we are most likely into something like 15% remaining of this leg. We continue to be vigilant however.

Note that some of the deeper tools are indicating a pullback is pending similar to the one shown on the bottom chart. It may be more of a volatility spike accompanied by a milder pullback in the market than the one shown but at this degree and within the relative size of the pattern seen, it could put the fear in some. Yes, we have been saying this for a while but it no less remains on the table especially with some recent clues showing up. Not yet at the big one (top) - more upside to go. Keep the dramamine handy.

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Weekly VIX Prints Significant Penetration Signal

After a closer look, the Bollinger Bands are indicating the strong likelihood that the chart is further along and that the correction highlighted in Sept 1998 is 'wave pattern aligned' with the correction that already bottomed in March 2020. Of course, the degree is much larger but the alignment holds merit. This would put the progress closer to a historical wave pattern alignment in mid 1999 and closer to a leg high (top). The more realistic 50ma take-off dates are in 1995 (wave A) and 2018 (wave C)- 2.75 years and 2.25 years (approx) respectively between 50 ma take-off and a correction low clearly visible on a weekly chart. Keeping in mind volatility and degree inflation- it looks like a similar candidate fit. See 2nd chart. Bear in mind, if the compliment is correct at a mid-1999 alignment, then VIX could continue on a weekly penetration move that persists more or less for a few weeks in total. That did occur in mid-1999.
 
original post-
The study here was done to try and estimate the general market progression. The main take away using VIX is regarding the 50 and 200 moving average patterns as they are often very successful at identifying a set up. As can be seen using waves 'A' and "C' , there are striking similarities in action comparing 1996 to today. A VIX print just penetrated the 200 ma and is unusual as far as what that may mean in it's general isolation. Since we have been expecting a correction at some degree and disregarding any subjective bias, this evidence certainly looks compelling.

It is not anticipated that this will produce anything more than a relatively minor corrective but at these levels of degree, it may look impressive.

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4k Was Always Calling - Projection

12:15pm 4k target hit as shown, perhaps could be a wave 'iii' with green border.

Daily cumulative bullish strength is hovering around 60% which is adequate minus any component vector failure showing up. Also noted that the moves up from 'iv' (green border) seem to keep breaking into smaller and smaller discreet multi-wave up formations. Perhaps that's just a time spent moving between price zones requirement.

The previous target calculations using UPRO did not pan out and after further study it was concluded that the extension origins were too early in the price cycle to be accurate for that purpose. A better target zone is now being reviewed from a more recent origin and that will be posted. If readers recall, the critical price extension levels in UPRO were being estimated as they produced a good signal for volatility spikes but only if daily breadth NYAD MACD was showing negative components below zero datum in that price vicinity.  That process has now been revised to only use larger degree waves currently active though the baby will not be thrown out with the bathwater and if calculated targets from lower and higher wave origins agree and breadth confirms, that will be included and published as part of the projection

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