Massive VXX implosion is possible today

[GordonTheGekko]

I'm currently long XIV. Got hosed today, but seems as though it will certainly come back. The fear wall in the VIX isn't helping.

Am I just sending money down the tubes by staying long XIV?

 

[trefoil]

Quote from GordonTheGekko:

I'm currently long XIV. Got hosed today, but seems as though it will certainly come back. The fear wall in the VIX isn't helping.

Am I just sending money down the tubes by staying long XIV?

Yes.

This is a picture of the momentum of a certain economic indicator. That big heartbeat over on the right? That's 2008. According to this, we're diving into another one of those fun times.
This, like everything else, could and has been wrong. But you really don't want to be betting against it.

 

[bond_trad3r]

Quote from trefoil:

Yes.

This is a picture of the momentum of a certain economic indicator. That big heartbeat over on the right? That's 2008. According to this, we're diving into another one of those fun times.
This, like everything else, could and has been wrong. But you really don't want to be betting against it.

 

[trefoil]

The answer, when found, is simple. - IBM

 

[atticus]

Quote from atticus:

We've just begun to see index vol. No way we trade to 20 into the holidays. I can do better, but that Dec 18/20 put spread at $0.65 is a massive short.

 

[dtrader98]

Quote from trefoil:

Yes.

This is a picture of the momentum of a certain economic indicator. That big heartbeat over on the right? That's 2008. According to this, we're diving into another one of those fun times.
This, like everything else, could and has been wrong. But you really don't want to be betting against it.

As far as indicators go, that's a pretty sweet looking indicator.
I like to think of the sandpile metaphor, you can keep dropping grains of sand and as the pile builds up, there's a certain critical instability threshold to it. Some don't exceed the threshold enough to go unstable, others (infrequently) do, but the fact that's it even approached that threshold gives a higher probability to the potential for an avalanche. This is one of those times, IMO.

And if we do have a meltdown, it seems to put the whole 1/100 yr. revised black swan event theory into a whole new modeling perspective (which I've already seen in 08 draw-down serial correlations).

 

[GordonTheGekko]

That graph makes zero sense. I think it would be nuts to buy TVIX today. What's wrong with buying XIV (reverse VIX ETN)? Can you give me a definite indicator instead of a graph that looks like cartoon trading?

 

[trefoil]

Things are getting worse fast. Exponentially fast, which is why it looks so nice on a graph.
Bloomberg's carrying a story about how hedge funds are net short now, as they think the final act in the eurozone drama is about to finally play out.

 

[GordonTheGekko]

I read on The Street that hedge funds are growing increasingly bullish. When will Europe end for the short term?

 

[S2007S]

Quote from GordonTheGekko:

That graph makes zero sense. I think it would be nuts to buy TVIX today. What's wrong with buying XIV (reverse VIX ETN)? Can you give me a definite indicator instead of a graph that looks like cartoon trading?

Agree, anyone finally getting into VXX or TVIX is absolutely crazy, the time to buy these two is when the VIX is under 20 not over 40!!!!!

If you are long VXX or TVIX you might still be able to make some kind of gains on them but dont think you are going to grab the gains they have showed over the last 3 weeks!

Everyone knows that the VIX jump is temporary that it will peak and will drop extremely hard in the next days to 1-2 weeks!

XIV is what I would be jumping into starting either tomorrow afternoon or sometime early Monday, who knows what news is left to come out over the weekend in Europe.

I think XIV is good for at least a 20-30% jump in the next 2 weeks, back to $10+ is where my prediction stands by early September.