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).
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.
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).