I was just checking out the VIX futures or VXX (short term VIX futures), things actually make some sense there.
First we have the NFP tomorrow morning (Non-Farm Payrolls), I'd think with the ADP jobs data missing on Wednesday and Initial Claims missing this morning, the Non-Farm Payrolls are likely to be thought to come in at a miss tomorrow ands if the invisible hand at the Open Markets Desk at 33 Liberty Street in New York reaches as far as the BLS, then it wouldn't be surprising if the Non-Farm Payrolls come in at a miss, giving Yellen a little time that she could not buy herself at her first press conference which was at first take, a revival of Alan Greenspan's "Greenspeak" (muttering along for an hour and having no idea where he stood 60 minutes later), but realizing that she was just an absolute disaster.
In any case, I'm not an economist or a jobs forecaster, I don't think Initial Claims for a week makes that much of a difference and ADP is such a noisy series that I stopped reading their emails long ago when I was on the distribution list for their Payroll data.
All I can go by is what I expect based on what I see and then confirmation or non-confirmation of expectations based on what I see.
Here's what I see as of now for VIX futures/VXX...
We have the break of the trendline, the relative strength in VXX that was seen throughout even the February short squeeze rally, it seemed like it was never going to break (and thus never be accumulated in size), but it finally did and very close to the start of the Cycle (smaller) from March 27th. We want to see larger volume on the break of the diagonal trendline as well as the horizontal and there's a slight pick up (this tells us supply is available which is what is needed to accumulate as well as lower prices), we saw some of that, nothing spectacular though.
During the accumulation process it is VERY typical for prices to get very range-bound and volume to drop, you can think of it as Wall St. doing their business in a sneaky way that doesn't attract attention, no different really than the way you'd play poker, not showing your cards, trying to keep your "tells" under wraps. This is why I'm always at heightened attention in a dull market.
Looking at the price action since the break, does that look like a mature or proportional reversal process to you?
To give you a better graphic, this is something like what we have thus far, just imagine price shooting up from here, it would look very tight, angular and odd, not proportional.
This is still a tight process, but the bottoms are almost always much tighter than a topping reversal process. Note how I drew in price to create something like a typical "W" bottom and how the process is now wider, that would require that VXX come down a bit and if you saw the charts from the SPY Put follow up post, then you probably know what the VXX intraday signal looked like.
"If' VXX dropped to form a "W" shape as drawn above, we'd need to see evidence of that in the form of a small negative divergence, intraday would do it.
It would also be VERY high probability that a "W" process would have its own head fake, meaning a lower low on the second bottom of a "W" pattern as this is a fractal concept. I'll be setting VXX price alerts for either a horizontal trendline or below the $40.70 area.
This is the same 1 min intraday chart I used in the SPY Put decision, there was an intraday negative divegrence as you see above so that fits nicely so far.
"If" the SPY were making a true head fake move or a bull trap, we all know that they aren't just a pop above resistance by a few cents like yesterday's SPY +.33% move, they are convincing and are usually a bit stronger than that as they clear the ask stack, so the SPY to set up a bull trap/head fake might...
The 15 min chart (with the smaller cycle highlighted on the time scale) is leading negative, so a NFP pop and a SPY move above would still have very high probabilities of being a head fake move and this 15 min chart would likely put in a deeper leading negative low as a bull trap is set up via distribution or even churning.
As for the VXX 1 min in scale, you can see a lower low would help the accumulation process, but we are already leading positive, just not in a flying divergence that the VXX is known for at extremes. The other thing of note is the positive divegrence started on the first day of the break lower, this is not typical, usually it wouldn't start until the base region (I'm guessing the $41 area) is reached which implies some urgency.
The 5 min chart is leading positiver, it doesn't have to go far for a flying divergence as I drew in, a second bottom or "W" would be enough to do it as far as time, we've seen these develop in an afternoon.
With almost any other chart, I'd be looking AT A LONG RIGHT NOW, BUT I KNOW AND A LOT OF YOU KNOW WHAT AN EXTREME IN VXX LOOKS LIKE AND THAT'S WHAT WE HAVE BEEN WAITING PATIENTLY FOR.
The 10 min chart already has the base of a flying , leading positive divegrence, it doesn't need to go far to put one in, note also I drew the "W" with a head fake/stop run (under the yellow trendline-thus the reason for the price alert).
The 15 min chart shows the same kind of divergence already in effect, like I said, if this were any other asset, I'd already be looking at a long position.
Note that there was not enough distribution at the highs of the chart to show up on a 15 min chart implying that they used enough to move prices lower, but weren't eager to let go of any more than they had to.
The same is true of the 30 and 60 min charts, both also have the same leading positive divergences as you see above on the 30 min.
VIX futures went positive at the first moment of the break below the trendline, they are still very positive on the 15 min chart.
VIX Futures...
We don't really have far to go as you can see above, but I think we have a little to go.
