A different view of the Vix [Futures]

The only reason why the trendlines are on this chart are to show the rate of decline and the amount of time in terms of months from cycle bottom to top from the 2008 era and this current market cycle.

The lowest print (the cycle low for all the data given in this set) was put in place in December of 2007 at 10.1 total value of the futures contract, it then took 23 months to reach its peak for this cycle at 69.4 in October of 2008

So here we are now 11 years after December of 2006 with the lowest Vix value printed given the data available here and it has been 111 months which is 9.25 years with a 86% decline.  This is of course using the data from Vix index futures. 

I don't know if the bottom was put in, and I also don't know where it will be if its coming in the next year or 3 years but one thing this chart does tell me is that it has spent a long time coiling, consolidating, tightening before another suggested breakout, the direction could be much higher because the total range in every one of these past 7 months has been between 2.8 to 5.5 and chances are if it does lead to any type of bullish activity in the Vix underlying the ranges can expand to 3x or 4x what they have normally done in this endless quiet period

To express my opinion I thought I would leave it only as here is a value proposition and just that.  It is low, its so cheap!  It can continue going on in the same direction (down) until something changes that, but for now objectively speaking it can be on of the greatest trades going forward into 2018 and beyond. 

Dark Cloud Cover [Candlestick Formation]

I made this one extra large for today to show the ES e-Mini S&P 500 futures daily chart 

What brings me to this chart today is the formation of Dark Cloud Cover, it happens when the real body is long and placed high above the "indecision" candle and could be a reversal.  Bearish reversals almost always need a confirming element like following bearish candles and follow through


The chart examines the extend of this most recent facet of the rally the line measures everything from 9/26 to today's height at 2665.25 ES, the 6.75% advance came after this short contraction from 9/21 to 9/26 its the tightest range of slightly bearish action, from there the red candles were fewer and even some had a shallow amount of downside penetration. 

"Wave 5 Somewhere" denotes the levels where it appeared the trend was starting to end, but it was quickly overtaken by last week's daily ranges which varied from 9 to 46 points, but counting waves with the Elliott wave format has not been working well for most people over the years

The range in total was 31.5 points and was a commanding sell off where the gap overnight was clearly overtaken as if the pop never happened. 

The expectation if the sell off takes hold is that the range expansion would lead to similar price swings that happen with the same kind of magnitude and depth.  There sure are plenty of good buys to be uncovered if the market would only correct and discover value. 

Overdone in Short Volatility Shares - A Potential Scenario; 21 points

There are two charts which make up this post.  The first is of the XIV and its respective trading range for these past 4 daily sessions. The topping doji/congested candle printed on 11/28 was merely a pause in the uptrend before what looks like the beginnings of a major reversal

Here are some observations about what the charts saying

The measured range in light gray take into account the entire drop from top to bottom of this week's range

• The swing from 121.38 to today's intraday low of 102.82 is a massive decline of 18.56, that magnitude of decline only happened during brief moments in the summer and other fleeting declines in the equity markets.
• The powerful origins of the September rally coincide with where my projected target ends.  
• Gaps and their tendency of filling means that it may take longer than I think, but there is a chance that the downtrend can pause at just below $81

21 points is extreme, but XIV was trading at an extreme for this week and prices tend to mean revert.  They go back to their longer term moving averages.  

When put in perspective a bigger percentage decline is not so exaggerated when compared to the advance since early November 2016