Bull or Bear Market… Doesn’t matter

Kyle Dennis’ new, 5 Min Strategy is poised to double Your Money Weekly!

Michael S. made 173% with Dollar Ace. So can you!


On the Watch: Credit Suisse AG VelocityShares Daily 2x VIX Short-Term ETN (TVIX)

Avatar ·

The set-up: I am looking for a short-term pullback in the market this week. The Russell 2000 (IWM) and the SPY (SPDR S&P 500) both made new highs on Thursday and started to pull back Friday. The Dow had an intraday new high on Thursday and the NASDAQ closed at a new high.

After having a nice uptrend, the Dow Jones Transportation Average (IYT) pulled back all week. In Dow Theory, in order for the markets to move forward, the transports and the Dow have to move together; last week, we saw them diverge.

What put it on my radar: In a word, gaps. There’s a gap in the NASDAQ that fills at $143.19, and another at $139.96 that fills at $139.23. The SPY has a small gap that fills at $245.74, but down further there’s one that doesn’t fill until $242.57. The Dow has a gap that fills at $214.34. Given the rise in the market and what I saw in market action on Friday, I expect that one or more of these will fill, so I am looking at a trade in volatility.

How I’m playing it: I will start a position in Credit Suisse VelocityShares Daily 2x VIX Short-Term ETN (TVIX) if it comes over Friday’s open of $16.77. I would stop out of that position on a break of $16.43 to the downside. I am looking for this to move up to $19.77 which, coincidentally, is the 20-period moving average.

Jeff Bishop of TopStockPicks.com has been watching the VIX too

Why it makes sense: I’m not bearish, I’m just trying to play a short-term reversion to the mean, a normal pullback in an uptrend. When price action on the SPY gets extended from its 20-period moving average, it tends to get drawn back to that level. It’s very stretched now, so I’m looking for that pullback.


Petra Hess runs PetraPicks.com. She is a technical swing trader and long-term investor in domestic and Canadian stocks. She only trades stocks, not options. At the time this article was published on RagingBull.com, she did not have any shares or open orders in TVIX, nor in ETFs covering the indexes mentioned, but she is considering TVIX for trading today as described in this commentary.

You may also like

Exclusive System Tracks Wall St. Insiders

“Dollar Ace Simply Exposes Information That Wall Street Wants To Keep Quiet” Said Kyle Dennis
“One member, Wesley M., has already reported 360%+ gains in just a few short days. Don’t miss this!”
(Reserve Access Now)

“What Recession?!” Jason Bond nets $55,060 in realized profit in One Day

After going 6 for 6 on profitable trades recently, we caught up with Jason to ask how he did it.
Check out Jason’s exclusive interview revealing this tightly guarded strategy. (Watch Now)

RagingBull.com Co-Founder, Jeff Bishop, Launches High Conviction Trade Service

“We listen to our clients and we give them EXACTLY what they want, so we designed a service to deliver 1 trade, 1 time a week, with a 100%+ PROFIT TARGET, directly to your inbox every Monday before the market opens. (Read More)

Be a Better Stock Trader, Starting Today

Get the expert insights, tips and strategies you need to optimize your trading skills and profiles