Departing from our TLT investigation on today’s market surge , this seemed like a good time to take a quick look at the VXX PDQ Dashboard. I actually use 3 different sector based PDQs to evaluate VXX . . the one shown above is based on the currencies and as evident, Friday’s outlook was uniformly negative. The VXX is down 4% today as of this post, twice the decay of the VIX. As previously mentioned, I prefer to trade the short side only of VXX and today’s skew of decline relative to the VIX is one reason why.
In the chat room last week I noted that whereas VIX, QQV, RVX, and VXN were all green the last few days of the week VXX managed to post uniformly red returns . . perhaps a harbinger of today’s poop-out. With the “Days In” number currently at 4 (Friday was 3) we’re fast approaching the 5-6 “Days” value that reflects the mean trade excursion length. This said, the PDQ either needs to issue a new SELL signal or we need to exit the trade by Wednesday. Our stops are set for a quick exit should things turn around.
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