Feb 2015

October 2013 had a crisis last year and another occurred this year. February 2014 had a VIX 21 crisis and I expect again in 2015.  However, October this year was a bigger crisis a VIX 26 vs 21.  With QE ending, the Feb 2015 crisis should also be bigger.

In Sep 2014 after the Fed meeting (Sep 17), VIX GHA, SPY RHA and TLT GHA occurred on Sep 22. This led to the building crisis in October.

After Fed Meeting Dec 17, watch for the same VIX GHA, SPY RHA, and TLT GHA.  Another TLT run is possible from (Dec 22/mid Jan)-mid Feb.

The spring swoon occurs every year due to overselling at Christmas leaving no demand for Q1! This will create a VIX 21+ crisis in Feb and another SPY rebound opportunity mid-Feb to March Fed Meeting (Mar 18 2015).

 

The lowest gas buddy in 4 years indicates a big crisis ahead (a weak economy) and it continues to fall! The last time gas buddy was this low and falling was 2008! (2008 had a much higher inflation rate so of course the crisis will not be as big)

Gas Buddy Falls

Based on October, we know the Fed doesn’t mind a -7% correction. The usual Fed ‘pain threshold’ is -15% correction. So this is possible in Feb 2015. It is usually over in just 2 weeks.

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