The VIX futures just saw a big boost in accumulation, protection is being bid, this is apparent in the Short term VIX futures as well. Remember that VIX trades opposite of the market, a positive VIX divergence is a market negative signal.
The real VIX futures just came alive with accumulation and a bid for protection,
someone is getting jumpy.
To show you the scale of this accumulation, look at the leading positive divegrence to the right,
this is a 15 min chart!
VXX 1 min intraday is seeing the same thing,
but the difference is, the pros knew the market rally was going to be distributed in to, they would rotate some of their assets out of protection and in to risk for such a move, but ultimately they know the probabilities as well and the asset reallocation would only be on a smaller trading scale, the major accumulation of VIX futures would be in place as it takes them some time to build a position that large, as we go you'll see that they only reallocated a small portion from safety to risk for the rally, they understand what's at stake.
THIS IS THE SAME REASON I LEAVE the UVXY long trading position open. The VXX February calls will expire worthless, the UVXY long position is not that far off and should be fine.
I may consider adDing a new call position with an April expiration, but I prefer to have an equity long trading position so if I do add to anything I'll let you know, AS YOU KNOW I DON'T LIKE TO CHASE.
2 MIN VXX ...whenever there''s a yellow trendline I'm usually trying to point out a head fake move just before a trend reversal. There was VERY little distribution at yesterday's reversal and as you can see the divergence is now leading positive
On a 3 min chart there's no distribution at the reversal which means it was very small, again we have a clear positive today.
The 5 min trend is in line at yesterday's highs, no distribution on this chart meaning it was VERY small and a positive divegrence building quickly today,
this is part of a much larger positive as you'll see.
On a 10 min chart from left to right, the distribution at the top is where the head fake move in the market averages was or the bear trap, smart money was well aware of this as we were more than a week in advance and rotated some money out of safety and in to risk, however the leading positive as the market ran higher (VXX lower) shows that they only rotated a little and did it at the very highs of VXX or very lows of the market, it looks like not only did they keep a large portion of the poposition intact, but added to it on price weakness.
The same 10 min chart on an intraday basis again confirms no strong distribution yesterday so whatever move "may" come in the SPX, they aren't worried about it or they would have rotated out of protection in size, the divergence only reaches a 2 min intraday chart which is very small.
The 10 min positive today alone is quite large.
Here's the 15 min chart, it shows in line on the move up in VIX and down in the market until the head fake market lows / VXX highs, even there the divergence at the top is not very large, the leading positive shows an increased ROC for 3C on the upside in to lower prices (the same concept as shorting in to higher prices if you know the probabilities), for a 15 min chart, this is an exceptionally large positive divegrence.
The market run which was one of the strongest we've seen in years did not have this much accumulation, that should tell you something.
If I can add to VXX or UVXY long, I want to do it in to intraday price weakness, otherwise I already have a position so I don't need to make sacrifices for the position, if it comes to me, I'll likely try to add what I can to UVXXY / VXX long for a TRADE, but a substantial trade.
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