Saturday, April 11, 2015

VDX Outlook...04.11.15

The market's had a remarkable run this week given all the negative news and bearish sentiment prompted by earnings fears.
M3 did a great job of capturing the move and ended up 8% for the week. The beauty of an algorithmic approach is that it tends to be smarter than the average brain which tends to get clouded with information overload, as least mine often does.
The SPY TrendX suggests there's still upside potential as does the latest VDX update below.
The XIV, on the other hand, has now crept into overbought territory and after a huge move last week may be due for a pause or reversal.  VXX is now at all time lows which might be a prompt to take a hedge position against a market reversal...just keep in mind that left to its own over time VXX would ultimately decay to zero since its comprised on constantly decaying derivatives.