Last weekend's "September Effect" forecasted a turn down in the market into September with the biggest unknown being when it will begin. This was the lead chart one week ago: SPY: July 29th It didn't take that long to get our answer: SPY August 5th: This coming week should see an acceleration down not only in SPY, but across the board in DJIA, QQQ & IWM. Also expected will be the beginning of a multi-week spike in VIX: VIX Intermediate Term Trend Model We are Long VIX calls in the PRO Service, with a new position pending in the Premium Service, subject only to the generation of an Intermediate Term Buy Signal. The past six trading days has seen VIX rise 35% from July 23rd into Friday's close, this is a huge move. My minimum expectation is for VIX to double from current levels, into the mid 30's before September monthly expiration, and possibly doubling again by October monthly expiration. If so, or even if only partially so, there will be massive percentage gains to be had in the calls highlighted in these two option tables: VIX Sep 20th Calls VIX Oct 18th Calls AAPL - When it comes to chart patterns, ugly is a four letter word AMZN - Another form of "ugly" as AMZN gapped up on stellar earnings than reversed and closed near its low of the day. QQQ - This chart is also from the PRO Service, reflecting the AAPL, AMZN and TSLA weakness: Dow Jones Industrial Average Daily Trading Model - Waiting for fresh Sell Signal DJIA 240 Minute - Sell triggered on close Friday Bottom Line A most dangerous month ahead.
