I NEVER do volaitilty indexes.....BUT... Fellas...do some research, and do not listen to me...but if you have any funds available....and if I am wrong..professionals tell me..but I plan to go heavy, put in a stop and hold to $35 or so ..... but IMHO...the volatility level and VXX price are making for some significant coin potential when VXX gets this low on such crappy volumes ........ We are looking a serious adjustment downward in the market (IMHO the market and the economic outlook as reflected in the overall numbers are going to get some serious compression shortly)... This is my thinking.....major option expiration Friday, the last 3-5 weeks are IMHO obviously overbought on historically crappy volumes, VXX is at 17.50 today and falling, last weeks volume is the lowest weekly level other than Christmas in two plus years, USG "adjustments week" coming in two weeks, housing values falling again, and earnings "season" is in our rear view.......consumer confidence levels are IMHO WAY WAY too high.............. The market is WAY WAY too optimistic on the economy right now and the VXX is finally showing that.........thoughts from the Pro's? If there are no thoughts then I am going fast forward on VXX at 17.50 with a stop at 16.80 or so....................
With VXX essentially the uncertainty IS what you are playing...but with a stop loss at 16.75 or so, not a lot of downside if you consider this the bottom of VXX. I never do ANYTHING financially as "all-in"..but it is hard to resist VXX at this level...but when you look at VXX being 33 or so in May and historically never gotten this low on this low of volume...IMHO it really is a no brainer with a stop loss at the level I am looking at....so really not playing any "guarantees" other than my feeling that somewhere around $17 is the low end of VXX....if VXX hits 16.5...I am out .75/$ per share less the insignificant fees...if it goes back to $33 then I make $15.50 per share. So long and short..I agree not calling it a "guarantee" but sure seems like a damn good play based on the triangle of consumer confidence/VXX price and volumes with the other factors considered.......and I am not a regular market "player" but rather do take advantage of opportunistic situations.
I personally view VXX as THE circuit breaker.....if VXX index gets too low (consumer confidence too high) then inflation becomes a part of the conversation .......and the housing market is still too low and the numbers getting worse again for the FED to risk raising rates at all anytime soon.....that is another reason I think the high side way outstrips the downside particularly with a stop loss....this economy is still way too fragile and the numbers way too bad for VXX to be this low......... Consumer confidence is higher than it should be IMHO because the baseline numbers of 2009 are SO ****ty that anything looks decent....but a sustainable recovery of Consumer confidence just is not there IMHO....the market is too reactionary and volatile and VXX should NEVER have reached this low IMHO.......AND we this administration has a new policy of revising numbers down so they look crappier the longer the time frame......"growth was 1.9%....que three months later....ooops that growth figure three months ago was really 1.1....our bad......" Just way too many reasons for VXX to be higher IMHO. In short.....LOL ....... IMHO VXX is the circuit breaker and hedge against T rates.................
