At 25.50 . It is presently at 22.8. the market is volatile and I am thinking the vxx index of options, should go back as panic of some sort sets in.
One can invest in this stock as it goes down, in contrast to the usual rule of not investing in a stock that is moving downward. In this case this is not a stock but the index of the volume of options which moves in reverse to the movement of the upward trends in stock indexes. In a bear market there is a upper limit to the stock market index movement since with every good upward trend in Dow there is another bad news that pulls it down. Hence in a situation like that, bear market, it is not a bad idea to invest in the reversal trend and make money on the difference.
The last time I was right when I purchased VXX at 25.5 and it moved to 27.75. As the market tanked. but the market moved up from 9500 to 10500. That was a unexpected move. One has to always expect unexpected moves in this game. what are the chances that the market will move higher and higher?
Very less because of poor fundamentals and economic situation and unemployment situation. There is also political turmoil together with economic instability.
Vxx can be a good choice in this situation and wait for the market to tank. The 30 day average of no help in this situation. In order for one to not get into the red zone(loss) one has to set a practical profit
percentage and get out of the profit. Also if the trend moves in the wrong direction to sell the remaining shares at at least the buying price. There is considerable speculation but also there is certain amount to certitude in the market tanking once in a while and the Vxx moving upward every now and then because of the bear market situation where confidence in the market is eroded frequently. I am sure there are many speculators taking advantage of the situation. I am still confident to keep purchasing this stock at considerable prices at it falls down and expect for a down turn in market.
When the market falls there is irrational selling. No one tells you to buy VXX during good times and at cheaper prices. I do not see any great risk in betting reverse in bear market and economic and political turmoil.
Should the VXX be shorted when it high and the market is low? The market turning high after it reached its lower bound has a high probability. If the market tanks badly, and for example one shorts stock at 30 dollars, then the market moves down and down, one loses money. In a bear market the upper limit is bound and not the lower. So shorting is not a good idea. Buying when the stock goes down is a good idea. What is the upper bound for Dow..One can set it at 11k....will it go to 12 k...or 13 k... when the economy was super heated it went to 14 k. I do not think that is possible now.
when VXX was 18.50 at Down 11K, the Dow tanked to 9600, the VXX moved to 32. Hence buying this stock moving down is a good idea right now. Keep buying it downward, when ever you have money and reap the benefits when the Dow tanks 10%, VXX moves 35%. Hmmmm