The VXX, an indicator of market volatility, is making new lows as the market goes higher. A reversal in the VXX should correspond to a reversal in the stock market. Notably, there’s a divergence forming between price and the bottom oscillator (a momentum oscillator), which means the next blip up in the index will be a (potentially tradable) buy signal. Divergences between prices and momentum oscillators precede reversals, and the technical indicators shown here are warning of a pending reversal. - IleneVXX Mechanical Trade Model
Guest author, Allan
You can trade the VXX directly, or trade the underlying market indexes. Should this signal be triggered and in light of the severely overbought market conditions, I will be looking for leverage to Short one or more major market averages.
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