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S&P500 vs VIX – Divergence Part 2

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S&P500 vs VIX

June 13


Frequent readers know, that I’m expecting a 5%-10% drop in the S&P500 before we take off to Higher Highs and the flight to private assets intensifies. As mentioned in the update of June 2, “S&P500 vs VIX – Bearish vs Bullish Divergence“, the key levels to keep an eye on are 2440 and 2415. Last Friday it tested 1st support 2415 and buyers (or should I say, Central Banks?) stepped in and saved the day….I do wonder, how long can they keep up this game? At some point, they have to let it go to form a Higher Low…

The Nasdaq sold off for the last two days, Apple went down > 5% but yet, the S&P500 does not seem to be impacted. It’s a strange thing to see, that most tech stocks are selling off, and those same tech stocks are also in the S&P500 but that latter one remains almost unchanged for the last two days…

FED MEETING

Tomorrow, Wednesday June 14, the FED will announce their plans regarding interest rates. They have hinted for several times now that interest rates will be increased so in my view, there’s no way back if they want to keep some of the credibility that they have left…

CYCLE DATES 

The next major Cycle Date is scheduled for this week (long term 70 & 140 day cycle) so to me it looks like the market is setting itself up for at least a 35 day  downtrend. Click here for the latest S&P500 Cycle Dates Report for June 2017, including the short term cycle dates.

Secondly, there’s a Bradley Model Date (100/100) scheduled for June 21. Click on the link to open the pdf Assessment of the 100-100 Bradley Siderograph Turn Date on June 21, 2017 or visit the source here.

BEARISH vs BULLISH DIVERGENCE

As mentioned in the last update, “S&P500 vs VIX – Bearish vs Bullish Divergence” there’s a huge divergence in progress. While the price of the S&P500 is showing Higher Highs (2445) the 14 day RSI is showing Lower Highs, indicating Bearish Divergence. VIX price is showing Lower Lows, while the 14 day RSI is showing Higher Lows: Bullish Divergence. Often, patterns like these signal weakness in equities and strength in VIX to come!

SWING TRADING SIGNALS

The S&P500 Swing Trading Tool generated a new Buy signal April 25 @ 2382. The price level that activates a new SELL signal is 2398. The Nasdaq already generated a new Sell signal June 9 (stop loss 5900).

KEY LEVELS

For the S&P500, keep an eye on the 2445 & 2450 to the upside and 2415 & 2400 to the downside.

2415 is the Low of last Friday…if that breaks to the downside, it could go fast….

MY PORTFOLIO & TRADES

Click on the link for the latest update of My Portfolio.

S&P500 vs VIX – Daily Charts


The S&P500 tested 1st support @ 2415 and bounced back up, stuck between 2415 and 2450. Use these levels to trade the break out.

The VIX rose almost 20% in 2 days,  and looks like it’s starting to get fired up for my summer target of 16-18.



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