VXX / VIX Futures Update

As many of you know I have been waiting I believe 4 weeks now for a nice entry in to VXX long which is a tracking ETN that is essentially a rolling long position in the first and second month VIX Futures contracts (SP-500). VXX moves opposite the market so for the market to put in a nasty crash, VXX will generally show these amazing divergences that seem to fly vertically like no other asset I've seen, I vcall them flying divergences.

In any case, that's one of the things I';ve been looking for in VXX as well as a good entry place. There has been some very good progress made (consider this is a rolling contract for the 2 forward months), but we can see the difference between how traders "were" behaving and how they are now, essentially how much fear there really is and when the divergences fly positive, there's a lot of fear and that''s the reason I suspect the divergences are so sharp in VXX when the timing for a large market downturn is there.

For the VERY short term, I'm "CONSIDERING" either a VXX Put position or perhaps a XIV or SVXY long position. XIV and SVXY are the inverse of VXX, in other words they move with the market so if we get a bounce, the VIX should drop and SVXY/XIV should gain and they can really move.

Volume in both SVXY and XIV is plenty for our purposes as opposed to some other similar VIX futures tracking ETNs. The main difference as far as I can tell is that XIV is NASDAQ listed and SVXY is NYSE listed, given the choice between two identical assets on two different exchanges, I prefer NASDAQ over NYSE every time (XIV), the reason being is the best actual bid/ask sets the open for the NASDAQ and it opens all assets at 9:30, the NYSE is different in that the specialist gauges the book of orders and determines the opening and they have the ability to delay the open, I learned this lesson the hard way when I was long some SKF (UltraShort Financials) and had a nice gain as Financials were tanking on the open, but I couldn't sell my SKF because they had not opened it for trading (the rest of the NYSE was open, it wasn't an exchange meltdown), the specialist didn't open SKF for about another 45 minutes and by that time, my gains in SKF were gone.

In any case, this is what VXX looks like...

 The 15 min VXX chart is transitioning from an inline status formerly to a leading status as lows are hit, this is why I felt a move up in the market was important because I doubt there's going to be much chasing of higher prices, the evidence is right above.

 Here's the 30 min chart, note the last positive that sent VXX higher and how small it is compared to the leading positive now.

Most impressively the 60 min chart, again a huge difference between the last accumulation area before an upside move and now. These are starting to look like the divergences I'm looking for, but we need them in all timeframes. The shorter timeframes are looking a bit more like the market is putting a base in and can/will bounce in the near term.

 This is the 2 min VXX chart, it went from an intraday negative to a pullback that was confirmed by 3C at the green arrow and then as we see the most recent semi-parabolic move, 3C WILL NOT confirm the move which it could have easily done by now on this timeframe.

The VXX 5 min had some accumulation areas before this semi-parabolic move, but again there's no 3C confirmation of the upside move which looks like there's going to be a pullback in VXX which should help with the accumulation and would also mean the market is likely to bounce.

 At 10-mins we have a positive and a relative negative divegrence, remember the 15 min chart is where the accumulation has started to accrue and the 10 min chart is appropriate as it's more or less in line with divergences in the averages as they aren't moving past 10 mins (if even that).

Inrtraday 1 min I see no entry for any VXX puts or XIV/SVXY long as the 1 min chart is confirming price action nearly perfectly so far, that would have to go negative first and then we'd need to see what the other timeframes out to 10-15 mins look like.

As far as actual VIX Futures (/VX)...

 The 60 min is looking great, like the VXX 60 min as it leads positive and in a short space.

However at 15 mins there is a relative negative right now, relative divergences are the weakest form, but since it is a 15 min chart it deserves some attention.

 The 5 min chart has some recent softness in it as well, if I were considering trading the futures though, this would not be enough for me to trade short.

The 1 min intraday in the VIX futures though looks pretty bad, if you are wondering why it looks so different than VXX's 1 min chart, consider this is the April VIX contract whereas VXX is April/May so there can be more action in the May contract (accumulation) that causes the imbalance between the two.

I'll be watching,  we are past the 2 pm hour and it appears the Op-Ex pin has been pulled, this is where we usually get some of the best data for the coming week so if I'm a little quiet it's not because I'm not working hard, it's because I'm working harder.