Early Warning System
Updated
I've scripted my own early warning indicator. This system has provided very accurate warning signals the last few years as to where potential tops were forming. There are several occasions where it detected changes weeks or even months ahead of trend changes. Occasionally, it's a little too early at providing these signals. I can't reveal all my secrets but I was able to use data provided in TradingView that measures true investor sentiment and implied volatility. It also provides decent confirmational bullish/long signals, but it really depends on the type of market that we're in. Pre-2017, bearish signals were flattened and mostly ignored as the market rocketed higher.. I'll continue tracking this going forward and at least use it to assist my other forecasts - just another tool in my toolbox.
My current view of the market is not good. If you follow my updates, you'll know that I've been warning people about this drop and zone of volatility. Check out my other updates on the markets as well as the vix. I think it's likely to continue the next couple of months. However, take a look at the indicator and how the avg. is slanting upwards (green circle). This could be signaling a bounce in the market...but will it be like Feb of this year where we made a higher high in the market before the death drop? I have some long exposure as a strangle for such an event, but have been net short since end of August. I don't need to explain to you how the market is currently retarded in light of the fundamental picture. I'm not calling for a great depression-like melt-down yet.. We could see a lot of volatility the next few months but it may be just another opportunity to go long the market. I'll be here to provide all of the most accurate data I can for you.
My current view of the market is not good. If you follow my updates, you'll know that I've been warning people about this drop and zone of volatility. Check out my other updates on the markets as well as the vix. I think it's likely to continue the next couple of months. However, take a look at the indicator and how the avg. is slanting upwards (green circle). This could be signaling a bounce in the market...but will it be like Feb of this year where we made a higher high in the market before the death drop? I have some long exposure as a strangle for such an event, but have been net short since end of August. I don't need to explain to you how the market is currently retarded in light of the fundamental picture. I'm not calling for a great depression-like melt-down yet.. We could see a lot of volatility the next few months but it may be just another opportunity to go long the market. I'll be here to provide all of the most accurate data I can for you.
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mid '19 is an example of a whipsaw signal. The data provided gave a long signal before a drop and it also provided a sell/short signal before it rallied. But what's important to me about that signal is the average crossover was at a very low point on the scale.. I can look at the scale and see that it was potentially just a normal sideways consolidation pattern because it already gave a drop signal back in March-April before the May drop.Note
This 3x hidden bearish divergence on the vix had a change this week. I was long volatility the last month and eased out in these spikes. The rsi is still a factor to watch but there's a lot of room up here.. Remember, the market can rally while the vix is going up. It's not common but not impossible With the election and stimulus coming up.. The vix and vvix are so important to watch and understand.. Note
not much has changed- the market has bounced just like I thought it would. I suspect a possible flush down even if the market is in a medium term rally. I'll try to update at least once a week because the changes are minimal and subtle Note
5 waves up since March and now some type of correction.. what do you think? Simple ABC down or a flat correction before just going up up up? Note
This is interesting. Notice my stoch/rsi wavetrend indicator at the bottom and the red line, red boxes, red arrows. This is the 'no joke' zone. We've respected that level almost perfectly several times at other 'tops'. Since the last touch, we've had a very strange bearish looking divergence forming that is concerning. Note
we've reached the point where the lines will kiss. The question- will they cross or will price turn down hard with this acting as resistance? Note
Yesterday (11-16), the lines crossed. This can be a very bullish signal but it can also signal whipsaw/noise before another drop like the previous signals Note
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is this where we are? I have my doubts but watch for a possible drop soon. I expect that at the very least but do we (a) have another massive blow off top or (b) just crash? Note
zzzz... please wake me up when we get there. Note
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what do you think? Sell-off imminent? I'm hoping for at least an Aug'19-ish drop. We might not be facing a major top yet based on what I'm seeing.. but it does look a lot like the period before the last melt-up last fall. This can drag on for a long time but I am hoping for a correction here soon.Note
INCREDIBLE market! Bravo. It really pays to follow the trend. I've been very reluctant to leave on long exposure but price direction is the single best indicator. While it's possible to have a sudden flash down (like Aug '19), I have not seen this particular indicator show any weakness or early exhaustion signs since September. Market has been QUITE strong although I'm very concerned over the loss of volume and momentum. But that's not what this indicator does. I'm still hoping for a sharp, surprise drop ASAP Note
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observe put:call ratio trend. It's also worth noting the lower stoch/rsi indicator.
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