VXX (VIX ETN) hints yet again of increasing volatility
Updated
Rushing this out before market opens...
The VIX index is rather special (to me) and it is not feasible to use usual technical analysis on that chart IMHO. So, I use the VXX (VIX ETN) for a better idea when volatility spikes might occur. Am observing one just now with an apparent alignment of weekly adn daily factors in the charts.
On the weekly chart, noted that there was previously a bullish divergence where the VXX kept going lower whilst the MACD (left lowest bottom panel) crept up. Noted that when we had the MACD crossover, the following week(s) come with volatility spikes. There is an early indication that we might see a MACD crossover this or next week, suggesting that August would be volatile. The candlestick formed last week gapped up, attempted to close the gap, but closed at the high. This is a rather bullish candlestick, and an identified wedge breakout just might happen this week.
The daily chart uncannily bears (pun not intended) a similar pattern, but with more details, as the last day of last week closed in a similar looking candlestick, along with a gap up (that attempted to close and reopened), as well as a MACD crossover. These MACD crossovers in 2022 have been marked, last posted about this on 12 Feb 2022, which saw a period of higher volatility. Then formed the identified wedge, and bouncing off the wdge support twice, this time, it suggests that volatility is about to spike, and would probably breakout of the wedge.
Taken together, this uncanny alignment forewarns of clear and present volatility for the weeks to follow...
Having said that, I suspect that this is might be a short and sharp spike that could end the bearish status for a couple of months until we get into 2023. That's another discussion altogether.
Meanwhile, hold on to your pants, be ready for the volatility storms!
The VIX index is rather special (to me) and it is not feasible to use usual technical analysis on that chart IMHO. So, I use the VXX (VIX ETN) for a better idea when volatility spikes might occur. Am observing one just now with an apparent alignment of weekly adn daily factors in the charts.
On the weekly chart, noted that there was previously a bullish divergence where the VXX kept going lower whilst the MACD (left lowest bottom panel) crept up. Noted that when we had the MACD crossover, the following week(s) come with volatility spikes. There is an early indication that we might see a MACD crossover this or next week, suggesting that August would be volatile. The candlestick formed last week gapped up, attempted to close the gap, but closed at the high. This is a rather bullish candlestick, and an identified wedge breakout just might happen this week.
The daily chart uncannily bears (pun not intended) a similar pattern, but with more details, as the last day of last week closed in a similar looking candlestick, along with a gap up (that attempted to close and reopened), as well as a MACD crossover. These MACD crossovers in 2022 have been marked, last posted about this on 12 Feb 2022, which saw a period of higher volatility. Then formed the identified wedge, and bouncing off the wdge support twice, this time, it suggests that volatility is about to spike, and would probably breakout of the wedge.
Taken together, this uncanny alignment forewarns of clear and present volatility for the weeks to follow...
Having said that, I suspect that this is might be a short and sharp spike that could end the bearish status for a couple of months until we get into 2023. That's another discussion altogether.
Meanwhile, hold on to your pants, be ready for the volatility storms!
Note
I beg your pardon, I thought it was still Monday.Some parts of the analysis above is not valid as the last candle is Monday, and at least this current week's candle.
Nonetheless, the technical indicators, particularly MACD, is crossing over soon (weekly) or has already crossed over (daily). This does not change my outlook that volatility spikes are surfacing for the weeks to come...
Again, I apologize for the confused state I was in earlier.
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