VXX / VIX Futures

VIX short term futures (VXX) and VIX  have been outperforming the market all week, they've held a bid under them that has skewed the normal correlation (opposite) there market. I was showing this to you in the usual fashion by inverting the price of the SPX so you can see the relative performance difference, but it's so obvious now it can be seen on a normal chart in which the two trade opposite (inverse) each other.

The VIX futures are showing improvement today and I've been monitoring it all day, the only real issue I have with them at this point is the reversal process so they aren't moving off a tight "V" and the timing charts.

Otherwise, they should be making for an interesting position and I've kept not only July 17th VXX calls in place, but the UVXY (2x long VXX) ETF/Equity long in place as well,, as this week really has;'t been a concern for me with the time on the option contracts. I would have closed the positions early Tuesday and re-opened them shortly if the market had pulled back as I was hoping for, but really wasn't that concerned if I missed that opportunity.

 VIX Futures intraday

 This is the intraday VXX chart, the area in red is when I posted the charts of the VXX going negative short term and the market averages positive short term in anticipation of a knee jerk reaction,  today is much more like a normal F_O_M_C knee jerk reaction than yesterday. The post was, Market Update and Initial Trade Plan and beyond the signals posted pre-F_O_M_C, here's a reminder of the "Trade Plan" aspect of the post...

"Everyone is going to be reacting emotionally and moving all around, chasing the market if history is any judge. I think we are best served to stay patient, let the uncontrollable part we have no idea-the F_O_M_C- pass and the knee jerk start, if it will be there. Then lets see what's under the hood and let the trade come to us rather than chasing emotional games, again if history is any judge."

XIV, the inverse of VXX is showing a confirming leading negative divergence, this one moves with the market rather than opposite the market like VXX so the negative divergence is confirmation of VXX's positive above.

 I like the way the divergence is moving through VXX/UVXY timeframes and I'd be tempted to add to the position , however I don't trust sharp "V", I trust them just a little bit more than a parabolic move like today's market action, these parabolic moves tend to end just as impressively as they started.

This is the VXX 5 min chart, still leading positive with no damage done. Note the sharp "V" if VXX were to reverse to the upside right here, it doesn't need much to widen that area out if you look at the last low on the 11th. By that time, I'd also expect 3C to be making a new leading positive high (see the orange arrow), that's when I think timing ;looks good for VXX long or UVXY for an add-to or new position.

 Just as confirmation, XIV, the inverse of VXX on the same timeframe with an equal divergence, just leading negative.

 As for the relative performance, just draw some trendiness from last week, compare where the SPX (green) is relative to the trendily, VXX should be an equally opposite amount lower,  it's not. Protection remains bid