A subscriber wrote me earlier today asking me if it was a good time to buy the iPath S&P 500 VIX Short-Term Futures ETN (NYSE:VXX), the VIX tracker. Well, I certainly expect the volatility to rise but I don`t think that playing it through the VXX is the best way to benefit from it... But that isn`t the story I want to tell you.
That email conversation stood in my mind through out the day and I checked the VXX a few more times then normal (the VXX is not one of my usual indicators to read the market) and I noticed that the eMini S&P Futures were breaking out to new highs and the VXX was also rising. That is highly uncommon.
I was already short oil futures (and feeling the pain) so I decided to test the market selling a few dozen eMini S&P Futures with a tight stop. My reasoning was, "well, let`s who`s right, the VXX or the eminis?..."
Then, I checked the signals of the daily trading system, I read a few incoming messages and when I looked to the platform again I was already up 10,000 USD or so. Not bad for a "test".
So, what I would really like to tell you, is that if it wasn`t for that early email from Michael, I would not have shorted the market the way I did. In this business, everything we hear, everything we read and everything we say, counts. It affects your decision making process and thus the outcome.
So, thanks Michael.
PS: I don`t have time to elaborate on the US dollar long trade and on the Oil Futures short, but those trading notes were sent to the subscribers earlier;
I will leave you with a true masterpiece:
