VXX Trade Positioning

I couldn't be more thrilled with the way VIX/VIX futures (short term) held up vs the SPX today. If I had the opportunity to close out the VXX July 17th $18 calls this morning on a SPX pullback to yesterday's intraday lows early today (this did happen in SPX futures last night around 4 a.m. EDT), this is around the area I'd start rebuilding the position, likely in two parts. The first part as the reversal process gains a little more maturity which can be hours and the second and the additional intraday charts lead sharply. I suspect by the relative performance in VXX/VIX today, this will be ready sometime tomorrow, most likely before 2 pm.

 VXX 1 min-Even on a 1 min chart, the m,pst sensitive, therefore the most extreme looking the divergence, there's a very limited, very small relative negative divergence which is the weakest form.


The leading positive at the end of day is far superior to the top/negative.

Often the leveraged versions of the underlying will have stronger /earlier signals. Still on this 2 min chart of the 2x long VXX, UVXY, again, the negative divergence is very minor, almost nothing more than an intraday steering divergence.

 UVXY 3 min showing the same as well as a larger positive under construction.

 XIV is the inverse of VXX, it moved WITH the market, it is leading negative intraday and not a small 1 min divergence like VXX above.

XIV 5 min leading negative shows the problems were there well before today.

 VXX 15 min leading positive and what I suspect will be revealed as a head fake/stop-run below the yellow trendily where 3C is REALLY leading.

 VXX 60 min needs no commentary.

As for the reversal process, it is typically proportional to the preceding reversal and trend. To the far left the reversal process for a downside move and a larger downside move than today is a certain size. The bottom reversal process also is guided by this proportionality, although bottoms are often tighter than tops, but it is proportional to the preceding trend. Today's top reversal process is quite tight, it would be proportional to today's move.  Even though bottom reversal process' are tighter than tops, I still drew it a bit larger, although not much.

I'd be looking for the process to complete and for the appropriate intraday divergences to accompany the reversal process. I'll update these as they build tomorrow.