Thanks for the analysis. As I write this at 11:25am on Friday the VIX has pulled back to it’s 5 day moving average (at 12.23). This could be a good area to place short trades with expectation that the VIX bounces up and the 5 day MA turns up.

With a tight stop this could provide a decent risk reward opportunity.

Good luck to all.

savage is calling for a couple tags of the 10 dma on the way up first, and nasdaq to challenge ath first before the hcl, fyi

jameske – When a decent selloff in the broad markets appears likely, if & when I trade any broad market ETFs in lieu of or in addition to individual stocks, I’ll often opt for the higher beta indices such as the $NDX or $RUT, although there have been instances where the $SPX might stand out because either the charts are more clear (entry & exit levels/support & resistance levels) or it appears that it might have as much or more to rise or fall, based on the charts of SPX along with some of its top sectors.

With that being said, I’ll share my thoughts in the coming days as to which indices & sectors look most promising on both the long & short side. On a final note, I realize that some traders don’t have access to shorting or at least shorting the 3x ETFs and in most cases, they are better off just sticking with the 1x or possibly the 2x short ETFs such as SDS, QID, TWM, etc.. as the decay on 2x ETF, especially with the broad market tracking ETFs, is minimal when compared to the 3x ETFs, especially those tracking volatile sectors such as the biotechs & miners. I’ll try to provide the best alternative proxies for any upcoming long & short trades on sectors or indexes.

I do have access to CFDs but I have never had the confidence to try it out, and I do not know anyone else that has ever used them.

On the short scenario, Gary Savage is expecting a half cycle low in the stock market. And I checked back in early November one of your negative divergences also coincided with his prediction of a daily cycle low. I have not checked them all though. I also note that elliot wave theory usually views wave 5 as negatively divergent, which then leads to some form of correction or period of consolidation.