It always interests me, as many times as I have seen it, when confirmation confirms throughout so many asset classes and timeframes. I think over the last month we have established almost every day where the accumulation or stage 1 area for the current cycle was on just about every chart we look at, from 1/29 to 2/2, you'll see it again here in not just 1, but 3 confirming assets, but that's really not the point of this follow up to the last post.
In addition to the end of January cycle, I think you'll understand how the market makes its living by making the most amount of people wrong at one time, ending January the VIX was at a record long position, now it is back to net short, in other words, the move since Feb 2nd in the markets kicked record new longs out of their positions, also helping the market as the two trade opposite each other and now that we are looking at a stage 3 top, traders are once again set up to be wrong with net short VIX positioning since then (assuming VXX rises which I obviously believe it does as it's one of my least favorite assets to trade, yet I just posted,
Trade Idea: UVXY (VIX Short Term Futures) (long)...
As for the charts (XXX=Short Term VIX Futures ETF, UVXY=2x long Short term VIX Futures, XIV=Inverse VIX short term Futures ETN and /VX = Actual VIX futures). In other words, VXX, UVXY and VX trade opposite the market or SPX, XIV is the opposite of those 3 assets so it trades with the SPX. I'm using all of them for confirmation through multiple timeframes.
VXX 1 min. Remember Friday's "Week Ahead" expecting early week strength (Monday/Monday A.M.), this late Friday 1 min negative divergence would confirm the Week Ahead early Monday strength as it is a small negative that would send VXX lower (remember VXX, UVXY and VX/VIX futures trade opposite the market).
Thus today's positive divergence here is confirming SPY negatives or other averages.
XIV which is the inverse of VXX/UVXY/VIX futures and trades WITH the SPX shows the exact same accumulation area as all of the averages and most stocks we look at ...Jan 29-Feb 2nd, it also shows a leading negative divergence here like all of the averages we look at, which is the opposite of VXX, etc. and thus confirmation.
Tis is the 3 min VXX chart positive...REMEMBER IT TRADES OPPOSITE OF THE MARKET (AND XIV)...
SPY 3 MIN IN THE SAME TIMEFRAME/SCALE, LEADING NEGATIVE=CONFIRMATION.
UVXY (2x long VXX) shows a negative divegrence to the left, again it trades opposite the market, that negative divergence is from Jan 19 to Feb 2nd, the exact inverse of the market's base at the same time. You can see the large leading positive divergence to the far right.
In the same timeframe and scale, this is XIV which trades opposite UVXY above and with the market, note it's base/positive divergence again at 1/29-2/2 and a leading negative divergence confirming the UVXY chart above.
UVXY 30 min with the second negative divergence from the left at Feb 2nd and a leading positive position now.
XIV is the exact opposite with it's positive/base at Feb 2nd and a current leading negative divergence.
That would be in line with the SPY 30 min as well...
30 min SPY positive at Feb 2nd and leading negative now.
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