On April 21 the VXX Intermediate Term Trend Model went Long at $43.35. The May $50C still has 3 weeks until expiration, but anyone using a trailing stop could have already exited that trade. With VXX trading this hour at $41.00, a close above the $42.00 level will again trigger a Buy Signal. A VXX close above $42 will also trigger a VXX Buy in its Stochastic Model (see chart below). This follows yesterday's Stochastic Buy in the VXX Short-Term Model (PRO Service). If the market has in fact entered into its next leg down, these VXX Buys may be the most opportunistic way to jump on the early stages of the downturn. I'll post more on this in tomorrow's Weekend Update. For now, a close above $42.00 will constitute a repeat VXX Buy Signal with the May 15th $40C, $45C and/or $50C suggested for a highly leveraged way to trade the initial stages of the downturn. Finally, with today's decline the Dow is down 1.5%, the Nasdaq down 1.64%, the SPY is down 1.92% and IWM is once again leading the market down at -3.54%. The option table below highlights the effect those declines are having on selected options.
