Broadening Megaphone SPY and Inverse VXX
Updated
I inverted the VXX and analyzed the mood sentiment shift in 2016 when investors felt safe to invest post 2016 you can see the exact months when the agreement was brokered and VOL was sent downwards (upwards on the inverted chart). Both SPY and VXX are broadening - "Broadening formations occur when a market is experiencing heightened disagreement among investors over the appropriate price of a security over a short period of time".
This is clear as the US10Y yields continue to stabilize and get ready for another leg higher.
We can see higher highs and higher lows on the inverse VXX and now we see massive divergences on this as we are clearly moving towards the broadening pattern instead of downtrend on the VXX.
(Please understand the VXX was inverted to make this easier to see)
Please like this chart if you found it useful!
This is clear as the US10Y yields continue to stabilize and get ready for another leg higher.
We can see higher highs and higher lows on the inverse VXX and now we see massive divergences on this as we are clearly moving towards the broadening pattern instead of downtrend on the VXX.
(Please understand the VXX was inverted to make this easier to see)
Please like this chart if you found it useful!
Note
One more point of nuance - As Yields (US10Y) rise, then the Dollar follows (DXY). The market will claw and fight through this and VOL will likely flatten here instead of continuing the megaphone as a realistic case.Note
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.