Tuesday, April 05, 2016

Before the Bell: Voltality (VXX) Should 'Splode

Volatility should rise at the starting bell, there's nothing really more to say than that. It's been in a bullish declining wedge for a long time. Yesterday it had a good day with VXX putting in a 2.63% ascent (not quite an engulfing bar), but just enough to begin poking it's head out of the declining resistance line. Upper resistance could be somewhere in the region of $22.50 which is the 38.2% Fibonacci retracement.
Why are these things happening? Several events took place last night which deserve a brief summary:
  • U.S. Treasury has said that tax inversion deals are all but dead, thus imperiling the Pfizer-Allergan deal.
  • Bank of Japan has reiterated the possibility of additional stimulus.
  • Decline in German factory orders.
  • Final PMI for Germany, Italy and the EU composite all missed.
  • UBS and HSBC dealings have been thrust into the spotlight after the release of the Panama Papers.
  • Tesla deliveries miss forecast.