= 0001a - Analysis of Main US, CDN, European & Asian Sectors

Andre Gallant Rank: 76 Followers: 6 Votes: 8 Years Member: 14 Last Update: 25 June 2017, 11:12 Categories: Market Timing
Sentiment Analysis
General Market Commentary

ONLY ONE STOCK TO FOLLOW FOR BIG GAINS, XIV or its counterpart VXX (HVI.TO or HVU.TO on the Toronto exchange). Read more for explanations.

IN ORDER TO MAKE REGULAR GAINS AND BEAT THE MARKETS, INVEST IN A SECTOR WHERE BIG FINANCIAL INSTITUTIONS INVEST IN LARGE STABLE COMPANIES LIKE THE S&P 500. BUT INSTEAD OF BUYING THE S&P 500 ETF, WHEN THE MARKETS ARE UP INVEST IN THE 'CONFIDENCE INDEX' (XIV or HVI.TO). You can also short-sell TVIX (3X). For those experienced with options, you can buy Puts on VXX when the markets are up - for example between 2017-05-18 and 2017-06-01 Puts on VXX $14.00 have increased by more than 200%. If the markets are down you can buy Calls on VXX, BUT DO NOT KEEP THESE CALLS MORE THAN A FEW DAYS TO AVOID BIG LOSSES.

WHILE THE S&P 500 INCREASED BY 38% BETWEEN END OF ITS LOW OF FEB 2016 AND JUNE 23rd 2017, XIV GAINED 555%.

Due to backwardation effect, XIV and HVI.TO performance are high. Markets DOWN, buy VXX or HVU.TO however the contango effect can be devastating for these last two ETNs. Do not keep them for for more than a week or so. See charts 000x. See http://vixcentral.com/ for Contango.

For short term positions,
- Buy the stock when the 5 day EMA crosses above the 8 day EMA. If it is confirmed by the MACD histogram above 0 line and if PMO crosses its MA it is even better.
- Sell when this 5 day EMA crosses down the 21 day EMA.

For mid-term positions,
- Buy the stock above its 55 EMA and the EMA slope is positive. If the 200 MA slope is also positive it shows a strong positive trend; or the opposite if you short-sell TVIX.
- Buy the confidence index (XIV or HVI.TO) when the weekly close is above its 6 week EMA and confirmed by the MACD histogram above the 0 line.
- Sell when the weekly close is below the 6 week EMA. No confirmation needed on the MACD histogram below the 0 line.

See charts 0002 et 0002a.

Andre Gallant, a.gallant@videotron.ca

Less

0000 - Section 1: General Market comments

0001 US & CDN Confidence and Fear Indexes - Daily and 5 min.

0001a - $VIX - Volatility Index (Fear Index)

NOTE 1: It is possible to buy the Volatility Index; however, due to the contango effect if the markets are bullish your risks of losing A PILE OF money are very high.


NOTE 2: To buy the index you can use these US stocks VXX or UVXY or TVIX (leveraged) or this Canadian stocks HVU.TO (leveraged). If you compare the rates of changes of the $VIX and VXX you will see that there is a HUGE difference between the two; it is mainly due to the contango effect.


NOTE 3: It is possible to 'short' this index in bullish markets. Then you will buy the opposite stocks; you would buy the US stock XIV or the Canadian stock HVI.TO. Since it is the opposite of the $VIX, the backwardation effect helps these stock to have much better gains.

0001b - $VIX with DOW, S&P 500, NASDAQ and Russell 2000

0002 - US Confidence Index Daily

When the markets are up, the backwardation effect on this ETN brings great profit. For those who do not mind greater risks, you can use SVXY. For those who know how to trade options, you can buy a Put on VXX when the markets are up.

When the markets are shaky, get out immediately and check its opposite: VXX.

0002a US Confidence index - Weekly

The importance of this chart is to show the direction of the markets on the mid-term: bullish or bearish.

Wait until the end of the week for the signal confirmation.

0003 - US Fear Index Daily

When the markets have a positive tendency and direction, Never stay very long in this ETN; it tends to loose a lots of value very quickly. It is mainly due to the Contango on the $VIX. See comments on XIV. See this site http://vixcentral.com/ for additional information; the Contango Tab will give you a good idea of why VXX looses money very fast while XIV gains very quickly.
For those who do not mind risks, you can buy TVIX or UVXY with a leverage of 2x.

0003a - US Fear Index Weekly

The importance of this chart is to show the direction of the markets on the longer term: bullish or bearish.

Wait until the end of the week for the signal confirmation.

0004 - CDN Confidence Index Daily

The HVI.TO and HVU.TO are the Canadian equivalent of XIV or SVXY and VXX or UVXY or TVIX. The same reasoning applies.

0006 CDN Fear Index Daily

The HVI.TO and HVU.TO are the Canadian equivalent of XIV or SVXY and VXX or UVXY or TVIX. The same reasoning applies.

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