Stocks Waver on EuroTrash
The only investment the Masters can endorse today is the iPath S&P 500 VIX Short-Term Futures ETN (VXX). The fund is up 3.7% today and trading around $45 per share. Investing in the VXX is very risky, this is a timely trade and should not be played long term. However with the uncertainty in Europe with Greece and Italy taking center stage betting on volatility seems to be in order.
When fear hits the market and the Dow swings triple digits, the VXX tends to have a great day. The VXX tracks a perpetual (and hypothetical) 30-day VIX future. It typically tracks about half the daily move in the CBOE Market Volatility Index (VIX), though it's wildly variable.
What's clear is that EuroTrash is impacting our stocks, its why the Masters like the VXX for day trading. We have no clear direction of how Italy is going to clean-up its mess. Greece and Italy have new leaders, but no new solutions.
Trade accordingly and be defensive. Adding a little VXX to the portfolio could help in the interim as we will continue to expect stocks to flip flop.
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