With the $VIX at multi-year key support and just about all major stock indices at or near key overhead resistance, I am adding VXX (VIX short-term futures etf) as a speculative trade idea. As I recently posted, my preference (and current personal positioning) is to use VIX options or futures to trade the VIX but due to the complexity of options and futures, plus the fact that many who follow the site may not have any experience or even the ability to trade futures or options in their account, the VXX is probably the best and one of the few alternatives for those who wish either add a potential hedge to their longs (should the market experience a sharp pullback) or as a speculative pure play on a spike in volatility.
I will try to post an updated $VIX chart later as one should really focus on the chart of the $VIX vs. these VIX tracking etf’s, which often suffer from tracking error over time. However, I wouldn’t expect this to be a very long standing trade. My suggested stop would be on a move below 26.90 (about 0.60 below the current price) with profits targets at 30.50 & 36.70 so although my degree of confidence on this trade playing out is not as high as most trade ideas posted here, the extremely favorable R/R (5:1 to 15:1) makes the trade attractive IMO. Again, this a speculative trade so consider passing unless meshes with your trading style and risk tolerance. More experienced traders might want to take a look at the Jan-March VIX calls. The $VIX is currently trading around 14.13 at the bottom of it’s range. Although it has hit this level several time over the last few years, it rarely stays this low for very long. As always, DYODD.