luke1827
Long

Long VXX | Volatility Play | Associated S&P500 Chart Attached

FX:SPX500   S&P 500 index of US listed shares
131 3 0
Fellow Traders,

I'm looking to LONG the VXX             , which is a ETF that tracks the short-term VIX             futures . This is a volatility swing trade and might take weeks or months to play out. Here;s what I see:

Fundamentals
1. For the basket of stocks that make up the S&P500             , we are seeing less and less of them making higher highs on a 52-week average
2. Tim West does an excellent summary of the factors affecting the S&P500             here:

Technicals
1. On the monthly chart, the S&P500             is hovering around the upper parallel of the pitchfork dating back to 2003.
2. On the daily chart , price was rejected off R1 and did not manage to hit the blue upsloping trendline . This shows weakness.
3. When volatility is suppressed, it decreases marginally lesser, when it expands, it accelerates at a faster rate. This asymmetric behaviour is a primary reason for taking on this trade.
4. Lowest low on the VXX             sits at 25.5, giving strong support for this 2.7:1 reward to risk trade.

Trade Details:
Entry: 27.7
Stop Loss: 24
Profit Target: 37

I suggest risking no more than 1% per trade by adjusting your position size accordingly.

Luke

Check out my performance record of all published trades on TradingView: http://tinyurl.com/klkd2vr

Update - 8 Apr            
Changing stop loss to 22
Update - 8 Apr

Changing stop loss to 22
Reply
Divergence seen on Dailys

snapshot
Reply
Update - 1:56pm SGT 6 March

snapshot


Let's see if the downsloping red channel holds
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