VIXM long when RSI approaching 50
In my prior VIX ideas, I analyzed VIX value trends. I noted that the mid-term VIX etfs/etns (VIXM and VXZ) tended to trend downwards over time and also lagged behind VIX value movements. After then analyzing VIXM, I noted these observations can be seen quantitatively in the RSI. Note that the VIXM is usually declining with a negative RSI. Successful VIXM long trades appear to occur as the RSI trends up and crosses 50. Volumes are usually high as well. While I opened long positions in VIXM and UVXY, that was premature and these will not do well short term. Certainly a cost averaging approach can work but VIXM reacts slowly. I will not buy more VIXM until the RSI is trending up towards 50 with increasing volumes. Since these low VIX episodes occur during strong bull markets, drops in the S&P 500 (and rising VIX) are leading indicators for going long in VIXM.
The existing homes sales report will be released at 10 a.m. ET today.
The weekly crude oil inventory data will be released at 10:30 a.m.
I am 100% in cash now. I will open a small position today and will add if the market trend is favorable. Trade with care. VIXM is a money losing machine except during SPX500 downturns.