I plan to spend some time in updating the active trade ideas on the site today & figured that I’d start with TVIX (2x bullish $VIX ETN), as member @bigelephant had inquired about it. Basically, both $VIX (the spot VIX or CBOE volatility index in which TVIX attempts to track) & TVIX actually still look okay (decent, not great) from a technical perspective despite the fact that the stock market made a run at new highs yesterday. That doesn’t mean that TVIX won’t continue lower & it most likely will if the stock market continues much higher but for now (as of yesterday’s close), $VIX is backtesting the recently broken trendline from above while TVIX is backtesting the recent breakout level (the breakout above the downtrend line).
$VIX daily Feb 5th close
I will also add that just because TVIX & $VIX have pulled back to support following their recent breakouts doesn’t necessarily mean that I would initiate or add to a position in TVIX here. Had not both QQQ & SPY not taken out those 222.87 & 239ish resistance levels that were highlighted earlier this week & both were still testing those levels from below, then I would be able to make a case for an objective entry or add-on to the TVIX trade.
TVIX daily Feb 6th
However, as both have now taken out those resistance levels, for those that did not book full profits when the first target was hit for a very quick 21% gain, I think it is best to either sit tight on any existing TVIX position while sticking with the trading plan (same stop & price targets). One could also opt to use a more aggressive stop to limit any further downside from here. As I don’t see enough evidence to convincing me to modify the trading plan & close out the TVIX trade earlier or revise the suggested stop, TVIX remains an Active Long Swing Trade with the same parameters (price targets, suggested stop & beta-adjusted position size.. all of which can be viewed by clicking on the TVIX symbol tag located just below this post).