Where will Stocks Go from Here?

Magic 8 Ball

Mastery doesn't like the current pin action.  Time to place a small bet on volatility.

Weapons of choice for today's trading are the iPath S&P 500 VIX Short Term Futures TM ETN(VXX) and iPath S&P 500 VIX Mid-Term Futures ETN (VXZ)



The Dow Jones is having a hard time staying above 14,000.  The psyschology of current trading may finally peel back the problems we haven't escaped sine before Obama stepped back into office (i.e. U.S. Debt ceiling, EU and U.S. economic worries).  Should any panic strike the market, the profit taking will begin and stocks will decline. 


Mastery recommends taking out a small insurance policy by making a small position (less than 2% of your portfolio) via the VXX or VXZ.  Both VIX trading ETFs are never meant to be a long term play.  A simple lather, rinse and repeat if necessary ploy but never hold longer than a month.  As most of you trading know the VXX and its friends can bite hard and leave you with nothing.  We are preying and betting on 'fear' with these plays. 


There are plenty of reasons and Negative Nancy's out there that have been screaming the market is going to tank.  Those 'black swan' voices are going to get louder the longer we stay fighting the Dow Jones at 14,000.  It's just the way the market works, the end.  Don't fight it.


VXX and VXZ INFO
iPath S&P 500 VIX ST Futures ETN (VXX) shares have traded between $22.17 and $116.84 over the past 12 months. VXX shares are trading today at $22.43 a share.VXX


 


iPath S&P 500 VIX MT Futures ETN (VXZ) shares have traded between $21.83 and $57.49 over the past 12 months. VXZ is trading today at $22.02 a share.VXZ