Today's update is focusing on one particular set-up that may, or may not be about to trigger another leg down in the market. Certainties are a luxury that are only bestowed upon Jim Cramer. The rest of us have to do the best we can with probabilities. Here is one to consider in the days ahead. Because anything can happen at any time, I'm sending this out a couple of hours early today. The trading tables will be sent out later.
This is an hourly chart of VXX. It is tracing out a Wave 5 Buy Signal with two noteworthy characteristics of this particular pattern on this particular stock model. First, the target for Wave 5 (not shown) is projected into the mid-70's. That is hard to fathom, it would take another 1,000+ drop in the Dow, in a very short period of time, to get VXX spiking that high.
Second, the bottom window's indicator is called an "GET Oscillator." It is a momentum oscillator primarily used to identify the loss of momentum in a counter-trend retracement, suggesting it is about to end and the next leg of the dominant trend (in this case - VXX up) is ready to commence. When the oscillator drops all the way down to the zero line, as it is shown doing now, that's when the counter-trend momentum has waned enough to let the dominant trend reassert itself.
Oh, but if trading were only this easy. The fly in the ointment is that these patterns unfold as predicted only in about 2 out of every 3 instances. In other words, there is about a 67% chance that VXX is about to take off again, and conversely, the market is about to take another dive. Best way to play this is to watch the market for indications that another fall is in the making. The further down it goes (and VXX climbs), the higher that 67% rises.
Tables out later this afternoon.