Closely watching the VIX this week

 TRADING ALERT 
A possible US intervention in Syria will spark unrest in the global markets, the reason why I'm closely monitoring the VXX this week. According to my point of view there's a good chance that it will spike well over 20 points by Friday. Not only that, but it will trigger an upward trend from there. It has been relatively 'quite' when it comes to the $VIX for the past couple of months, I've always said that any number below 18 points is 'remarkable' to say the least; especially when the European recession was still in full force. An US intervention in Syria, a scenario that is now highly likely, would certainly cause a lot of volatility in the US markets. The VXX already went up by more than 3% yesterday ($VIX up 7+%). Already VXX options are filling up for the September 27 expiration date - a call option I'm mainly interested in (16).

Time to invest in the VXX call option?

Is it time to invest in the VXX call option? And I'm talking about the May 19th one in particular; with a strike price of 18. The markets are relatively quite in my opinion. The VXX trading under 20 is a bargain - as I said many times before. This is a nice money maker, take a look at the chart below:

Above you see the ETN: VXX; the volatility index for the S&P500. I noticed an upward trend regarding the markets; the DOW and S&P along with the NASDAQ seem to have streak after streak due to strong economic data. This is bound to change before or on May 19th of this year. People seem to forget despite the strong earnings, there is still a lot of negative economic activity going on, especially in Europe. I go by the saying, what goes up, must come down eventually and with the VXX trading a little over 16 I think this is a fantastic deal. Now trading at $0.60 (about $66) for 1 call option on this equity is a steal!

Time to short the VXX? (VIX)

The volatility index (VIX) dropped significantly today because of a better economic outlook. It's hovering in the lower 50, but is in my opinion still severely blown out of proportion. Time for a $48 put option? Open interest spiked to 13k making it the largest cluster around this ETN.
My judgement is based on the fact that the VIX has been around 20(!) for a long time (May, June - when I gave my buy recommendation), in my opinion with even more economic turmoil in the world than today. It baffles me why it spiked up to almost 60. Mainly Europe was the cause of this, but that seemed to have settled a bit as well.
The RSI in the chart below indicates it has been in the 'overbought' territory for way too long.

Time to short? I think so. Feel free to add any thoughts on this one.

Time to buy into the VIX

A stalling Dow may indicate the rally is over. Maybe it's time to buy into the VIX (VXX). Its out-of-the-money call option is currently trading at $0.62 (April 16). Although the Japanese nuclear dilemma seemed to have settled down a bit, with a European debt crisis looming, mainly because of Portugal asking for a billion dollar bailout, and Spain on the verge of doing the same, the 'fear' is bound to be coming up in the next few days. Especially now also there is a good chance of a US government shutdown.
Therefore I'm buying into this cheap call option. Another reason is that it looks to me the VIX is bottoming out, in other words, it won't go much lower then this.
As you can also see, the RSI is now in oversold territory (below 50).

This is the overall VIX pictured below, the actual option ETN looks likes this;

You see that its RSI value lies even lower then the actual VIX index

I'm putting in probably 10 contracts for this one..

Another few to look out for is still the;

• FXE ▼ (Still valid)
• SPY ▼ 
• QQQ ▼ 
• DIA ▼ 

These are all before April 16, the position size and strategy is of course determined on how much risk you can handle in your personal portfolio.

VIX trading in low pricing levels

This continues to amaze me... The volatility index trading under 20 while so much is going on in the world. From turmoil in the middle east (which now seems to be escalating beyond Libya, Egypt and Tunisia) to the nuclear crisis in Japan with toxic radiation jeopardizing not only the environment and on a humanitarian level but also economic situations that seem to be spreading globally. On top of that, there is still the emerging markets putting pressure on the global economy and somehow the VIX seems to be trading below 18.

This really puzzles me. And if anyone thinks he or she has a logical answer to this, feel free to reply to this post. I'm dying to hear what anyone else has to say about this since it's nowhere addressed really on any of the major financial news agencies. 

I pretty much started full time trading and my interest in it during, and a bit after the 'great recession', so for me I'm not really used to see the VIX trading anywhere under 20. (it topped 90 at one time in Nov of 08). The recession on Wall Street may be over, but Main Street sure still feels the pinch. 

So again, if anyone can explain this phenomenon please let me know, I'm curious to see what you have to say about this. 

For now, I just can't resist to be bearish on the VXX, an aggressive Call 35.00 strike price by April 16th, and judging by the open interest I'm the only one that believes this is a good Call.

Here we go again, playing the VXX ETN trade

Rising violence, chaos and instability in Egypt have surely an impact on the markets. There are numerous ways to approach several trading opportunities regarding this issue, like oil for instance, but I think I'm sticking with keeping an eye on the VIX, or the Exchange Traded Note (ETN) the VXX that tracks the movement of the VIX.
Now here is my setup for this trade; as always, any comments or questions are welcome.

First, a technical overview of this trade; the VXX

I'm taking the Feb19 Call Option on the VXX with a strike price of 31 for $1.33 (the VXX1119B31) with unlimited profit potential. Makes sense? With an important turn is history for the middle east where about a third of its total population is demanding revolutions in their respective countries, I think it makes total sense, it has to have an impact of the 'fear gauge' the VIX, therefore the VXX.

The intraday chart of the VXX1119B31;