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  • VIX Super Spike On The Horizon

    Complacent markets have often led to major panic selling and significant spikes in the well known Volatility Index known as the VIX. Recent euphoria has been tempered by geo political events, such as the Ukrainian Crisis. But markets around the world continue to be bought on any dip. So far this year any spike in the VIX has quickly been faded, and the S&P 500 is only thirty three points away from the all-time highs.

    It appears that market participants continue to ignore any and all news that could be viewed as disruptive to the markets. However, when looking closely, this may not be the case. When analyzing the chart of the VIX one can make a case that the smart money has been slowly accumulating protection. This is telling us that the markets could be entering a sensitive time in which the VIX could have a major spike.

    I arrived to this conclusion by looking no further than the recent Financial Crisis of 2007. There is many similarities in what the VIX did then, and what is doing at the moment. The year prior to the crisis of '07, the VIX made a low of 9.39 that was never taken out in early 2007. The VIX kept slowly climbing up throughout the year until it made a significant move from an early low of 9.87, to a high of 37.50 later that same year.

    Last year, the VIX made a low of 11.05 which has not been taken out this year, even as the markets reached new all-time highs. Instead the VIX has been slowly creeping higher with three major spikes this year and continuing to put higher lows in place. Using proprietary tools, specifically the, time counts and chart analysis, I expect the VIX to make a significant move to the upside over the next few weeks. This move should result in a VIX break out on the daily, as well as the weekly chart. This would send the markets into correction mode and possibly keep away the buy the dip mentality for months to come. For educated investors and active traders, this is a signal that cannot be ignored.

    Kiliam Lopez

    Pro Trader, Elite Round Table

    Apr 21 10:12 AM | Link | Comment!

    (click to enlarge)

    Since the beginning of the year the yield on the 10year note has seen a decline from (3.036%) to a low of (2.579%) of February 3, 2014. (Currently around 2.644%)

    This seems to be taking its toll on the financial sector and in particular the insurance stocks. They have been under performers this year so far with names like AFL, HIG, MET and PRU all down more than the S&P 500. Lower rates are a negative for these companies as it hurts their earnings. So if rates continue to fall, coupled with a weaker overall market the insurers could be hit with a double whammy.

    We will keep an eye on these names and the overall financial sector and see if yields continue to head lower.

    Parm Mann

    Elite Round Table

    Apr 16 1:08 PM | Link | Comment!
  • KLAC Gets Clocked, Watch This Level

    This morning, the leading semiconductor equipment makers are selling off at the start of the trading session. Some of the leading semiconductor equipment makers that are coming under early pressure include KLA-Tencor Corp (KLAC), Applied Materials Inc (AMAT), and Lam Research Corp (LRCX). These stocks are certainly being affected by the Intel Corp (INTC) earnings report which obviously stated a lack of new research and development spending. Short term day traders can watch for intra-day chart support for KLAC stock around the $62.50 level. This is an area where the stock could stage a decent intra-day bounce. Today, KLAC stock is trading lower by $1.32 to $62.84 a share.

    Nicholas Santiago

    Tags: KLAC
    Apr 16 11:14 AM | Link | Comment!
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