Wednesday, February 29, 2012

BUY TVIX @ $16.25


I decided to take a new position in VelocityShares VIX 2X ETN (TVIX) at $16.25. By luck I managed to buy just 5 cents above the low for the day. The True Strength Index (TSI) indicator read -0.90 at the moment of my purchase. Usually these kind of extreme negative readings lead to a bounce in price. Anyway, this is the chart I made just after my purchase.



Click on any chart to ENLARGE

I made this second chart of TVIX a few minutes ago to show where price traveled after my purchase and also to suggest that TVIX appears to be giving some thought to breaking out above $16.85. We shall see tomorrow.


And finally, I made this daily chart of the SP-500 with the TSI (7,4). The blue rectangles show where the TSI indicator has spent time below ZERO with the SP-500 carnage just overhead. Sometimes the correction is begun as the TSI flits like a butterfly just above and below ZERO. Other times a single sharp downward spike is all it takes. If the SP-500 were to drop another 6-7 points, as it did today, that would be enough to create a trend line break and the bears may just decide it is game on - finally.






My TSI Trading record has been updated.







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3 comments:

  1. JEFFtheFLEAFebruary 29, 2012 at 7:46 PM

    john,

    well i hate to admit this but i was useing the tsi settings 7,4 and not 4,7. Although when i switched them it did not seem to make a difference.
    So if it does not make a difference, then the negative divergence i saw on the gold was telling us something. Gary got us out by the hair and all is well.
    Good job on trades today. We got a little vxx as per gary.

    ReplyDelete
  2. John TownsendFebruary 29, 2012 at 7:57 PM

    Jeff - truth be told, there is NO difference between TSI (7,4) and TSI (4,7).
    I was a little surprised when I read Gary's report this evening because I bought
    TVIX entirely on my own and did not know what he was thinking - nor was I aware
    of how much gold had dropped during the day. btw, excellent call on the divergence!

    ReplyDelete
  3. AnonymousMarch 1, 2012 at 10:17 AM

    Many Thanks John! + 1 000 000 $ Can we say, DEJA VU! Yes!
    @VincentNeilY

    ReplyDelete

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