I can't say for sure the VXX decline is over, I can say I expected it to be brief, but I wouldn't say I expected it to be this brief. Still with decent double digit gains for about a day of market exposure, I'm not really in the mood to test the market over a speculative position at double digit gains right now.
With a cost basis of $1.62 and a fill of $1.83, that makes a +13% gain and worth the effort. TLT I believe is in an intraday bear flag that looks close to breaking lower so I suspect gains there will increase shortly.
As for the VXX charts, they are seeing some recent and strengthening 1 min positive divergences, but it was more the charts of the averages that made up my mind in this case.
The 2 VXX positions over the last 24 hours that we have taken action on were the Calls from last week in to yesterday which were closed around 1:15 yesterday with a VXX put position opened around 1:30 yesterday and just closed. We also closed the TLT call position yesterday at a +58% gain and entered a put position at the same time as VXX yesterday.
Note the 1 min VXX positive and the downside momentum turning more lateral intraday. As I said, there could be more downside, but I'm not really in the mood to let a double digit gain turn to a loss on a speculative position like this.
The SPY which moves opposite the VIX/VXX is showing a confirming 1 min leading negative divergence giving more credibility to the possibility of VXX being done with downside gains for now.
The average seeing the most upside action today, QQQ is also the one showing the worst 3C charts which makes sense as it would seem any upside gains are being sold/shorted aggressively and the Q's are giving them the opportunity to do that today.
QQQ 1 min with not only a leading negative 1 min divergence like the SPY except stronger, confirming the VXX 1 min positive above, but also a rounding /reversal process as momentum is definitely failing here.
The QQQ 2 min chart looks like it had a positive divergence yesterday that would be big enough to sustain a larger move, but as I maintained since yesterday and through today, this is more about the percentage move and not the length of the move as the base from yesterday is exceptionally small.
QQQ 3 min is turning negative as well, it's not the size of yesterday's divergence, but I suspect I should add a "yet" to the end of that statement.
And the 5 min chart is about neutral.
The IWM's intraday divergence never even moved to confirmation of its upside today.
And the IWM 2 min has been seeing a declining 3C chart all day since the open today.
Interestingly the IWM 5 min chart DOES look like it has more upside to go, but weighing all of the evidence above, I chose not to tempt fate here.
The earlier NYSE TICK hit a nice upside extreme of +1300 earlier today, but since then it has moved down in a channel to the mediocre range of +725/-450, not much action.
And our custom TICK Indicator shows yesterday's short term capitulation/selling event and improvement with today seeing that improvement start to deteriorate.
Again, I wouldn't be surprised to see more upside gains in the market and more VXX put gains, but I'm just not willing to take the chance with so little objective evidence supporting that view presently.
As for possible S{Y, QQQ, IWM put positions, it's something I'm considering, but I'd want to see more evidence.
I don't usually like these short term or especially day trades, but when there are good signals, it's hard to turn away from what the market is willing to give. That's the best we can ever hope to do, take what the market is willing to give, very rarely does the market give what we hope to take.
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