Wednesday, March 10, 2010

The state of the rally

We can measure the state of this rally by examination of the VXX, which is an ETF replicating the implied volatility of the VIX futures.  Weekly, Daily and 240 minute charts follow, then a brief discussion.

VXX Weekly

VXX Daily

VXX 240m

The 240m  must trigger Long before the Daily, which must trigger Long before the Weekly.  Until the happening of these events, this rally persists.  Looking at these charts nightly gauges how aggressive one should be taking the shorter term index triggers, such as the SPX and QQQQ 60m models.

Nothing is etched in stone here, it just a matter of lining up the probabilities in our favor before making commitments on the short side.


1 comment:

Anonymous said...

interesting to see that blue/red line converging here on the 240 chart.

fits in with one of my cycle timing devices.
may be more telling toward end of the week.

next few market days may be very telling.