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Public blog posts only as education and entertainment. private membership market updates reflect my view and analysis of the market. The information contained on this website and from any communication related to the author’s blog and charts is for information purposes only. The chart analysis and the market comments do not hold out as providing any financial, legal, investment, or other advice. In addition, no suggestion or advice is offered regarding the nature, profitability, suitability, sustainability of any particular trading practice or investment strategy. The materials on this website do not constitute offer or advice and you should not rely on the information here to make or refrain from making any decision or take or refrain from taking any action. It is up to the visitors to make their own decisions, or to consult with a registered professional financial advisor. And i absolutely discourage trading options.

Sunday, March 27, 2011

interconnection correlation of $USD, $EURO, $VIX, and $SPX.

3/29: some asked about "the crash potential" of the rejection of LT back test trend line. the potential does exist, but it's intermediate-term time frame, in terms of months, after a few up and down cycle setup. roadmap, structure, pattern and potential timing has presented to members. to go for this potential at present time is unwise.
$rut is 1 or 2 sessions away from a two-year high, can it make it? i have some "good" analysis about $rut and the popular traded tza. also have $vix and vxx.

effective immediately toward end of April, i will donate 50% of new membership fees to Japan red cross for the earthquake and tsunami relieve.

In this weekend report, I review the structure of long term, intermediate term, and short term of $USD, $EURO, $VIX, and $SPX. They all show interconnection correlation supporting each other in short, medium, and long term pictures.
Also details all the major market structures and their patterns and Elliott waves.

• $spx $usd long term ratio analysis.
The LT back test trend line is the backbone of $spx and $usd.
During Oct year 2002 $spx bottom, it found support at the LT back test trend line and launched a five year bull market to the new historical high.
During Oct 2008, it jumped through the LT back test trend line with a major decade level crash.
During Apr ~ May 2010, it got rejected at the LT back test trend line with a flash crash.
Here it got rejected again at the LT back test trend line. It’s interesting to see if there will be a coming crash and at what level. Unless it climbs the wall of worry above the LT back test trend line to launch a multi-years major bull market from here, it does not matter if it back tests the LT back test trend line one more time at higher ground or not, this “crashing characteristic” of the LT back test trend line remains true.
I do not have the ratio data back into year 1987, but from the LT $indu back test trend line, I see Oct 1987’s great crash also is a product of the rejection of the LT back test trend line.
As in the past three instances, a singularity occurrence of back testing of the LT back test trend line is sufficient. Or it could be an inverse of Oct 2002 bottom with a failed secondary retest, then a slow long lasting market plunge would be the case.



• If a potential some type of crash is coming, following two historical crash patterns could be as a reference of the roadmap.

• As currency $USD plays an important inverse role of above correlated market behavior, next topics are on US dollar and Euro dollar long term and medium term, which support the above scenario as following pictured analysis with the potential of the collapse of Euro dollar and the rise of US dollar.

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• $VIX of long term and medium term analysis also support the above pictures.

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