UVXY Trade Management

Friday the 13th of March, I took the UVXY (2x long short term VIX futures) off the table as I saw no further upside in it as the market was ready to bounce further and I wanted to preserve the +10% gains, here's the post, Taking UVXY (2x long VXX short Term VIX Futures) off the table for now.

I just replaced that position in the tracking portfolio as was always my plan as the bounce neared its end, that was just this Monday, Replacing UVXY long position and now it has a nearly +9% gain.

I'll likely close this one down for the time being as well if the market does as I suspect and broadens the base intraday.

Here are the charts and what I'm looking for...

 This is the SPY intraday. Earlier I mentioned it needs a larger base to bounce from and to do that, it needs to move down toward the intraday lows forming a "W" like base.

If this happens as I suspect it will and if we see stronger 3C accumulation in the averages, I'll take the UVXY long position (trades opposite the market) off the table , not only because of the increased probability of a market bounce and a VXX/UVXY pullback, but because I'll get a better price for it down there on the market pullback (as VXX/UVXY trade opposite the market averages).

If this were just VXX without the 2x leverage I may have considered holding it through a bounce as the big picture charts are very strong for a big move up in VXX/UVXY, I would just prefer to take the gains on this leveraged asset and re-enter at better pullback (for VXX/UVXY) prices.

As for the charts, remember VXX is short term VIX futures and UVXY is the 2x leveraged ETF of VXX).

 VXX 2 min, very near term has a minor negative divegrence as it looks like someone is taking some gains off the table in anticipation of a market bounce.

The UVXY chart should give the same signals to confirm VXX, this 3 min stronger timeframe does as you can see, the upside since the last long entry was confirmed by 3C as it moved up with price, but in this area it is starting to diverge.

The 5 min chart shows the cycle better with accumulation at the Tuesday lows (we entered late Monday) and we have a negative divegrence now. This is just for this small area.

For longer term positions, you must consider the longer term charts and this is why I keep coming back to VXX/UVXY at reasonable pullback areas and closing the position before they pullback again, however a part of me wants to just stick out the longer term trend trade, if it weren't for the leverage of UVXY vs VXX, I might have just decided to stick with it through any market bounce.

 This is the 15 min chart with an amazingly large positive divegrence, this not only suggests a large primary uptrend in VIX short term futures, but a large primary downtrend in the market.

The longer/stronger 30 min chart is even more impressive. Note the initial positive divegrence to the left around November/December and its run up. Since then on the pullback, it looks like VXX has seen strong accumulation of lower prices as smart money or deep pockets build a longer term trend position on what would be a large "W" or Double base between the two positive divergences.

These are the charts that make me want to just stick with a longer term trend trade, but I can't just walk away from a 10% gain in 3 days and the ability to replace it at better prices.