VIX - detonator clock still ticking

Todays action was kinda dull, nothing significant yet. Lets take a brief look at the VIX

VIX is still failing to show any significant moves, although the underlying negative cycle - that has been ongoing since last October is likely soon coming to an end. Immediate upside target remains 20/21, max' upside 24/26 on any brief surge.

Weekly VIX offers hope for entertainment in March

Note the MACD cycle, its still around 2-3 weeks until positive cycle begins. Even if VIX 20/22 is hit this, it'll likely be another 2 weeks until we get a confirmed VIX buy signal. Those holding other VIX instruments like VXX/TVIX should be able to comfortably hold until then. 

What is good is that we do seem to have a very secure floor now of VIX 16.

Metals - the overall trend remains amazing

Just a single chart each for those shiny precious metals!

Gold remains in an extremely strong 11 year up cycle. The 2008 deflationary collapse wave is a mere minor set back in the scheme of things.
A pullback to 1300/1200 seems very easy to attain. I've seen many of the cycle analysts also tout around the $1200 zone in the past year. Right now, sub $1000 looks unlikely, considering the long term vulnerability of all FIAT currencies.

Like Gold, Silver is similarly in an astoundingly strong up cycle. From a mere $4 to $49 in 11 years! However, Silver does suffer more than Gold in any pullback. In this chart, you can clearly see the impact of the 2008 collapse wave.

Right now, a pullback as low as $21 seems very reasonable - in any near term deflationary wave.


Long term, the precious metals remain the ultimate buy

Both Gold and Silver are without question two of the simplest means to have an insurance policy to protect against the insane printing maniacs.

So, current best guess for any near term (6-18month) pullback for Gold and Silver.... $1200 and $20 respectively.

SHLD – approaching an important level

Retailer Sears has seen a massive recovery – at least in its stock price, since the January 9^th turn. From around $29 to $75 in just 9 weeks, that is certainly one hell of a move.

Yet, is it really any better now than two months ago? I'd suggest the answer is probably not, unless you believe retail sales are going to rise across this year, along with the company seriously improving its cost base structure.

Bullish case

If SHLD can break into the 83s, then yes, I'd declare that as a clear break, and maybe it'll make a charge for $100. It has good up-trend support at $60, and the 10MA at $64

Bearish case

A break below $60, and I'd be very concerned SHLD will make a challenge to test the low 40s.

Clearly, the ultimate warning line right now is the January low of $29.

Balanced outlook

Chase above 83...or short below 60.

If the main market does have a minor pull-back, to around sp'1300/1260..but then starts to surge..then SHLD would be a prime lunatic candidate to make an attempt at $100 again – a level its not seen May 2010.

Next earnings data

Sears is not doing well, its margins (much like AMZN) are too narrow. Analysts are expecting further losses, and even a full year loss next year too! So we have a $75 stock, and some say its not only going to hold this level, but keep rising. All whilst it will likely put in losses for another 4-6 quarters minimum? Err, no, that is not good.

Sure, the crazy market might kick SHLD up to $100. For the moment, I ain't meddling in it, but I'll sure watch it, especially if it breaks back into the 50s. After all, its a long way from $50 to sub $10.

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*Tis Sunday evening, the futures wheel opens up in 4.5hrs. I'm not going to expect anything much overnight, but bears will want to see some decline across the Monday-Tue period. I believe AAPL is due to release IPAD'3 this Wednesday, so that sort of media hysteria could help prop things up from late Wed for a day or two.