Strangely VXX and UVXY which is the 2x long VXX (Short term VIX Futures) have actually had some of the best signals this week. I'm including the XIV charts as well which are the inverse of VXX, that means they tend to move WITH the market rather than opposite the market. I also have some VIX Futures charts in here as well.
Although these are ETFs all mimicking an underlying asset and as such are meant to move a certain amount that is equal, inverse or 2-3x leveraged the underlying asset,
3C uses them and gives confirmation or non confirmation because even though prices may move similar, volume is totally different and indicative of demand and 3C is based on volume as well. I like to use multiple timeframe confirmation and multiple asset confirmation as much as possible, the differences in volume between these similar assets allow us to see confirmation/non confirmation of the underlying signal or the asset we are interested in.
VIX Futures...
VIX Futures intraday 1 min show mostly in line at the green arrows which is 3C/price trend confirmation which means there's no significant underlying trade that is contradicting price, otherwise known to us as opportunities. It isn't until the cash market today that VIX futures intraday are in a deep leading negative divergence suggesting distribution which wouldn't be surprising near local highs on a pullback in the market along the lines of what was suggested in the early,
Opening Indications.
The 5 min VIX Futures also shows a negative divergence. Typically for any type of trade from swing trade to a trend trade, I require that at least the 5 min chart is in line with the direction of the trade, thus a short VXX (
or put position), should confirm with a clear negative divergence which is something I've been looking for since yesterday's late day market positive divergences during the last hour.
The VIX futures 10 min chart is just a bonus was you can see the negative divergence to the far right,
VXX (
short term VIX futures), UVXY (2x long short term VIX Futures) and XIV (
Inverse VXX),,,
The current short position at full size for a short term trade is in UVXY. This is the intraday 1 min chart of UVXY showing a large relative and then stronger leading negative divergence through the last several days and much worse today.
UVXY 2 min chart shows migration or strengthening of that negative divergence as it is also leading negative here.
VXX shows an overall larger accumulation area,
note the "U" shaped base as mentioned several times earlier today. This is a concept that works on any timeframe from intraday to several days for a swing trade to a full on primary trend that starts a bull market. I'd expect at some point this larger positive divergence to reassert itself and see VXX climb higher meaning the market move lower, but near term the chart has gone negative suggesting a pullback, both in several areas that are specific and across the entire range.
This VXX 5 min chart shows the same thing, although I removed I added the smaller regional negative divergences which sent price lower (smaller red arrows).
This is
XIV, the inverse (opposite) of VXX / UVXY and tends to move with the market. The large 1 min leading positive divergence confirms the leading negative divergence in UVXY above.
I didn't draw in each divergence, but color coded them on the time axis so you can see them for yourself (
red=negative, green =in line/confirmation and white- positive divergence).
VIV'x 2 min chart is also leading positive confirming the leading negative 2 min UVXY chart above.
XIV 3 min shows the migration or strengthening of the divergence as seen in VIX futures, UVXY and VXX above and the current divergence is leading positive, again confirming the VXX leading negative signal.
XIV 5 min is also leading positive after the last distribution area at the red negative divergence sending price lower. Once again, this confirms the VIX futures as well as the VXX/UVXY charts.
That's a lot of timeframes in 4 different assets all confirming and the reason the UVXY position is at full size as the charts to support the trade are there.
XIV 15 min which is a much stronger timeframe, JUST TO KEEP THINGS IN PERSPECTIVE. There's a huge leading negative divergence or distribution at XIV highs, this is still in effect and despite short term positive divergences, this is the highest probability resolution of price action. In other words, while all of the charts above are pointing to a near term bounce in XIV and pullback in VXX/UVXY/VIX futures, the bigger picture tells us that it will not hold and eventually XIV/and the market will head lower.
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