VXX will generate an Intermediate Term Stochastic Buy Signal on any positive close today (Friday). Early in the session it is up almost 5% to 27, up from a low of 23.64 on Wednesday. Intermediate Term Stochastic Buy Signals for VXX, which are based on daily price bars, are relatively rare, occurring only about 3-4 times a year. About 1/2 fail, which means 1/2 succeed. In February a Stochastic Buy sent VXX from 14 to 78. The March $15C went from 1.25 to 47.20 for a gain of 3676%. Extrapolating from that trade, the potential for this trade, if triggered, is somewhere between -100% and +3676%. Position accordingly. Buy Signal Pending: VXX (26.80) Option: Sep 18th $28C (2.38-2.42) or Sep 18th $30C (1.94-1.96) FAQ: Buy now, or wait until later in the session when it can be determined with more confidence that VXX will close positive on the day? A: Either way, but buying earlier should carry with it the caveat that if VXX loses its gains and closes down on the day then the trade will not yet have been confirmed. It may or may not follow-through next week. The other possibility is that VXX starts running higher today to such an extent that its obvious the signal will be confirmed and pulling the trigger carries less risk VXX will reverse negative on the day. Today's high print is 27.70, so a run taking out that level would pretty much confirm the Buy.
