Thursday, April 25, 2013

Long VIX Futures, VXX / UVXY (Short XIV)

Obviously these are trade ideas and it's probably not wise to take every one of them (position sizing, correlated risk, etc.), but I still want to provide them.

I'm not sure if I'll have room, but for a short term market reversal to the downside either VXX (Long VIX Futures) ETF or the leveraged version of that, UVXY will both work; I prefer to be long UVXY.

If you prefer shorting something, XIV is the inverse of VXX/UVXY and moves largely with the market so if you wanted to short, that would be the short.


Here are the charts for all 3, all 3 have confirmation.

 VXX 10 min chart (about the right timeframe for the market averages' negative divergence/pullback timeframe) is leading positive.

The 1  and 2 min charts are in line so they aren't giving specifics on intraday timing, but I personally have no problem going long VXX/UVXY right here.

The leveraged UVXY 10 min chart leading positive confirming VXX.

The inverse XIV 10 min chart leading negative, confirming VXX/UVXY.

And again XIV confirming intraday charts are perfectly in line.

The only timing help intraday will be from momentum indicators such as these below (momentum, RSI, MACD, Stochastics) showing positive divergences which most are, you'll want to check multiple timeframes, but I really think we are close.


Remember leverage cuts both ways so make sure to use risk management and position sizing and consider UVXY is leveraged.

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