The daily and hour chart of VXX were the catalyst to turn the markets down on FEBRUARY 19!!
Mar 06, 2020
The daily and hour chart of VXX were the catalyst to turn the markets down on FEBRUARY 19!! When markets were at stellar highs.
Daily Chart of VXX with MACD divergence up February 19, 2020
Hourly Chart of VXX with MACD divergence up February 19, 2020
Most of the indexes were at or near all-time high as well as most leading components such as AAPL, AMZN & MSFT.
THIS VOLATILITY INDEX IS A MEASURE OF FEAR, EVEN THOUGH MOST FOLKS THINK IT IS ONLY NEWS, CAUSING THE SELLOFF!
It is really just “fear” of the unknown! It PAYS to understand VOLATILITY if you plan on making any money trading in the market options!! Volatility on February 19, 2020 the MACD shows us the level should be much higher.
So what did MACD say about SPY on February 19, 2020?
Daily Chart of SPY with MACD divergence down February 19, 2020
Note how the price peak was actually higher than before on Feb 19, but MACD top was much lower, confirming the opposite pattern on VXX chart! Since SPY has 3 expiration days each week, this set up great trading opportunities for both short and long duration trades, but the options should always be purchased at the last price peak when the divergences were clear.
