VXX Showing Positive Momentum Divergences

Mike Paulenoff MPtrader

Time for a look at VXX (VIX ETF of the futures derivatives of VIX), which we see remains firmly entrenched in its downtrend. In fact, the most recent portion of the bear market in VXX, off of the Aug. high at 56.28, cuts across the price axis this afternoon in the vicinity of 36.15, which at this time looks light years away.

That said, we all know that one day the short volatility trade is going to blow up in a startling way. That said, VXX exhibits many positive momentum divergences that suggest that downmove in volatility just maybe ready for a pause, and a reversal into a notable recovery rally.

Yeh, yeh, yeh, I know... We will believe it when we see it...

Author

Mike Paulenoff

MPtrader

Michael Paulenoff has been a student of and a participant in the world financial markets for the past 26 years, since his graduation from the Georgetown University School of Foreign Service in 1979.

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