Tuesday, June 14, 2016

Volatility Pops Going Into 2-day Fed Meeting

Readers will remember from this weekend that I was vacillating about a position on VXX, the Volatility Index ETF. Yesterday it broke out of it's bullish wedge big-time with VXX climbing 14.80%. On the short-term indicators this is now horribly over-bought so I expect some calm over the coming days in order to produce a proper buy signal, but the message here is that we are on the cusp of a new leg up in volatility. We've just had a cross-over in the TRIX and KST indicators which are reliable long-term indicators as well as divergence on the MACD(13.34,0), so the rounding bottom in VIX must be acting as support now.