VXX Mechanical Trade Model
by Chart School - April 13th, 2010 1:18 pm
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. - Ilene
VXX Mechanical Trade Model
Courtesy of 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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Allan’s newly launched newsletter, “Trend Following Trading Model,” goes along with the trading system he’s been working on for years. Most trades last for weeks to months. A special 25% discount is available for PSW readers. Click here. For a more detailed introduction to Allan’s methods, read this introductory article.
NEW INDICATOR IS POINTING TO RENEWED ECONOMIC WEAKNESS
by ilene - March 9th, 2010 2:53 pm
NEW INDICATOR IS POINTING TO RENEWED ECONOMIC WEAKNESS
Courtesy of The Pragmatic Capitalist
Interesting stuff here from Econbrowser and Professor James Hamilton on a new indicator created by Goldman’s Jan Hatzius and several others. The indicator is deteriorating substantially in recent months and could be pointing to further
Read more about this interesting new indicator at EconBrowser and at the Chicago School’s website.