Tuesday, June 28, 2016

Volatility (VXX): New Acending Channel Or Bear Flag?

I'll admit I'm having a bad month (and probably a bad year) so passion and irrational exuberance got the better of me and I entered a VXX trade yesterday and got burned today. Who came me blame though? EMA(13) just crossed bullishly over the EMA(34) and remains above it today, albeit barely. Volume has increased tremendously in VXX recently with my MACD(13,34,0) indicator just crossing into positive territory two days ago. Long term indicators are also beginning to show a changing perception towards volatility and risk which I think is a fabulous development as the market in general has become far too complacent and laissez-faire towards relaxed central bank policy.
After the rapid rise that started in the beginning of June VXX today ended right at the EMA for support which leads me to think, if we see a further breakdown of this support tomorrow I think a bear flag has formed but if there is a recovery from today's fall (for reasons I am not entirely clear if I'm honest) than we can probably postulate a new ascending channel has formed.