VXX vs. CBOE Vix
VXX and the beast that is volatility....
The markets are starting to revive the wild moves which made up most of 2011 and it was the best year for this type of ETN product. Click on each of this charts to view them.
This first chart depicts the full retracement from this
year's lows to the peak near 55.88 and its corresponding 50% retracement. In this you'll notice how fast of a decline
VXX experienced with the temporary peak on 2/6 and 2/8. The reversal hasn't totally happened
yet. Although there are some signs of
slight topping, VXX is still in its middle to higher segments of its trend, the
series of higher highs has yet to be violated and in this case we must be ready
for a possible cut through of 45 before anticipating the free-fall down to the
50% retracement at 40.73 or the 61.8% level which stands at 37. On some level the entire move can be erased
which is why I included 32.07, which is the starting point of the whole surge
higher, however it will take a great rally to accomplish this. Yet this security may just need more time to catch up with every measure we have of tracking the Vix. [We are always watching the CBOE Vix, /VX futures, and the VXX ETN]
CBOE VIX second, at 25
It has shown a tendency of touching the 50% and 61.8%
retracements more often and its reversal has shown stronger signs of downside
momentum. The rejections of highs are
coming in with longer toppign tails and its averaging lower prices. So the $20 target is in sight and we will be
watching with intense interest to get back down to the origin near 17.5 and 20 where the market was first
spooked about monetary policy and the year ahead for 2018
No comments:
Post a Comment