UVXY Ultra VIX ETF Daily Chart Falling Wedge Oversold Positive Divergence

To button-up the fear theme this morning, here is a look at UVXY, a long volatility ETF, like VXX and many others. These are dangerous trading vehicles. Price keeps falling but note the attractive positive divergence now in place and the weekly chart is positively diverged as well. This hints that the bounce in the VIX is very close at hand.

Look at the high volume sell candles over the last few days.  All the traders that held on to UVXY believing it would recover gave up hope as the broad markets moved up thru SPX 1366, 1377, 1385, 1391, 1394 and almost 1400 yesterday. The long red candles show capitulatory selling so this indicates the wash out for UVXY has likely occurred, or is very close. The two blue lines show where a potential inverted H&S may form moving forward; it will need a right shoulder as time proceeds. The current lows would serve as the head. Projection is for a bounce in UVXY to occur now which would correspond to a market selloff. Keystone opened up a long position in UVXY yesterday and also holds VXX although that trade remains underwater obviously dropping as volatility drops. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.