A look at the VOL

The UVXY is UP Volatility and SVXY is DOWN. There is also Point and Figure. Presently the high volatility trade is catching all the action, and these are nervous hedgers, gamblers and the lot. At 11 price is at the lower trendline in a large flag formation. A break of that line @11.81 would suggest this is a continuation pattern and lower prices are likely. The money flows show a double bottom break of the oversold level. The last oversold was November and we are [indeed] lower now than we were then. OBV appears to be whistling past the graveyard. The long term A/D is a washout. If I owned UP VOL and I saw a rally back to the 50dma I would unload my position. However there may be more to the story, so let’s suspend that judgement.

Meanwhile the SVXY, the short volatility play appears to have the institutional backing (not hard to figure that out) and OBV is inverse mirroring of the Long Vol version. Fair enough. This put in an overbought recently, and the last overbought was in November and surprise, prices are also lower. The 50dma does appear to have some relevance (white circles). The trend lines are expanding, and price is back at the 200dma. Momemtum appears to be carrying this one higher (which means VOL would be dropping> Then there is Point and Figure:::::

The interesting problem here is that it will take another large spike in Vol to create another buy signal and erase that BEARISH PRICE OBJ of 14. Meanwhile Fridays drop should create a column of O’s and a 3 box reversal would solve that Uber low objective. We just have to wait and see

This just gave a sell signal with an objective at 16. That is not all that low historically. Triple bottom breaks are setups for traders. You sell the break, When price reverses three boxes, that would be 23, then the seller would initiate another low risk position. 24 blows up the trade,

When price falls again to 20 that creates another sell signal. You sell the first triple bottom break, add to your position on the pullback, and add again when the bullish catapult is complete. What’s really fascinating here is the possibility of the pullback busting the trade, resulting in a bear trap, which would open the door in my mind anyway, for some real rough sledding in the markets and a push back in VOL to 37 or 38. I see we just hit 23. Enjoy the rise, its going to be bumpy night, probably.

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