Sorry for the hyperbole in the title. Neither I, nor anyone else knows if the bull market will continue another day. This post is a follow up to one I wrote on the weekend. In that one, I looked at the $VXX performance after it had gone up by 15% over three days.
For the last three years, every time the $VXX met that criteria, it dropped back on the fourth day. Nine out of nine.
What does that have to do with the bull market? In a discussion on Stocktwits, another member @allgoodtrades remarked that we were in a bull market, and the $VXX wouldn’t continue to spike like it did in 2011.
And lo and behold, what happened on August 4th? The $VXX did drop, a substantial amount, actually. Ten out of ten now. Leading me to conclude the bull market is intact, the SVXX should keep dropping and all is right with the world.
OK, that’s a stretch, and I intend to remain cautious. But from this indicator, I see no reason not be optimistic, or upbeat, about the market.