I sent this special alert out to the short-term service just moments ago. Short-Term traders or not, the analysis affects all of our positions, whether intermediate term or short-term. A new leg down may be unfolding.
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From Jan 26th to February 9th SPY fell from 286 to 252, 34 points. Then from Feb 9th to Feb 27th SPY rose from 252 to 279, 27 points. Both of those moves were caught by this hourly SPY trend-signal chart:
As you can see, the trend-signal algorithm has just gone SHORT (and VXX hourly below has just gone LONG). If this signal is similar to the previous two, SPY can easily trade down 20 or more points in the next two weeks. The SPY Mar $275 put is trading this morning around 3.50-4.00. This put has potential to rise multi-fold in a new leg down for SPY and the rest of the stock market. The same can be said for the VXX, which in the first leg down virtually doubled in price, sending our calls into the stratosphere.
The hourly chart seems to be in charge here the reward side of the reward: risk equation is outstanding, and worth the risk of buying SPY puts and re-entering the VXX calls.
Feel free to use your own strikes and expirations, all based upon the assumption that we have started a new leg down. The SPY March $275 puts and the VXX March $50 calls look good (albeit risky) to me.