VXX’s relentless sell-off to historical new lows continued with last week’s plunge, mirroring the equally sensational and extremely overbought condition of the bull market itself. If VXX goes on to achieve the 26.32 downside target shown, it would imply that the S&Ps over that same time will continue their ascent with little or no hesitation, presumably to the 25113 rally target we’ve been using or even higher. We’ve refrained from trading this vehicle unless it is at or very near a major Hidden Pivot level. That means that if and when 26.32 is reached or very closely approached, we’ll try to buy some near-the-money calls with a week or two left on them. In the meantime, we’ve spared ourselves money and anguish by not chasing the several upward spasms that have occurred over the last month. The thing to notice is that even if you had bought calls just hours before these volcanic eruptions occurred, booking a profit would have required quick reflexes, since each thrust gave way to a fleeting peak that lasted not days or even hours, but minutes. _______ UPDATE (Dec 11, 6:24 p.m. EDT): Volatility’s historical collapse continues apace. VXX could conceivably reach the longstanding target at 26.32 within the next 5-7 days. If this event were to coincide with Dow 25113, my current minimum objective, it would by the Rick’s Picks equivalent of a Hindenburg Omen (or some such mysterious indicator). _______ UPDATE (Dec 17, 9:45 p.m.): If VXX falls all the way to 26.32 today — unlikely, in my estimation — buy eight 29th December 29-strike calls. You should bid for the options only with VXX trading 26.36 or lower, day order. Pay no more than 0.39 for them, but check in the chat room for a possible adjustment if they won’t come at that price. If there’s no fill, we’ll revise the order for Tuesday.______ UPDATE (Dec 18, 6:06 p.m.): My price guesstimate for the calls was way high. For today, bid for eight 29th December 28-strike calls with VXX trading 26.36 or lower. Bid them between the reflected Bid/Offer and show some restraint by not paying up too obscenely. The best way to get a ‘feel’ for a ‘fair’ price is to track the Bid/Offer for the options once VXX has fallen below 26.60._______ UPDATE (Dec 19, 9:14 p.m.): Shift down to the $27 strike, still with a 29 December expiration. My rough guess is that the calls will be well priced for around 0.50, but you can take up to 0.10 discretion on the order, which is good for Wednesday only. Remember: This is a very speculative bet, albeit with better odds than a scratch-off ticket or Publishers Clearing House Sweepstakes. Bet only what you could lose without feeling a twinge of pain._______UPDATE (Dec 20, 6:07 p.m.): We’ll have no orders working at the opening bell, but I’ll put out fresh guidance intraday if VXX gets close to the longstanding target.
_______ UPDATE (Jan 1, 10:30 p.m.): Zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz.
