Once again cue the VXX

Psycho - Shower Scene

Fellow Masters we've been through this before, volatility is a new low once again.  Lather, Rinse, then repeat.

Its that time yet again -- the iPath S&P 500 VIX Short Term Futures TM ETN (VXX) just hit a fresh new 52-week low.  You know the drill, its time to buy some VXX as a protection should fear and panic enter into the market (again). 

We point this out every time it happens (click to review) and we stand by our recommendation of buying some VXX to hedge your portfolio.  Of course the rally could keep going and volatility can continue to fall.  However we are approaching the bottom of the VXX and its a big warning sign for traders and the Powers-that-be that control the market.

Fellow Masters we haven't seen volatility this low since 2011. That is when price changes were 1.3% between April and the end of December, twice the five-decade average, according to data compiled by Bloomberg. Daily swings reached 4% in December 2008, data using 50-day moving averages compiled by Bloomberg show.

MASTERY Bottom Line (Ninja Style)

MASTERY Bottom line: 
A bottom in the VXX can't be overlooked. 

Let's pray it stays at this level for a while but when can you ever count on the market for stability.








You bet the VXX can keep heading lower, use caution.

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Hi, I've been following your blog. I hold some long positions on VXX, and bought some at low levels also when you highlighted. I believe that economic conditions can still offer some serious turmoil, hence i initially bought VXX. Recently I'm beginning to question my purchase, VXX keeps crawling lower, while VIX is at similar levels of jan-feb '12. Can VXX keep on falling, to single digit levels? Of course it can I guess, I'm just a bit lost on the correlation etc. Been reading a lot on the backwardation and contango of VIX, but still I feel like the drops on VXX are steeper then the rallies. Shorting VXX on the highs seems "safer" then the other way around.. Either way, I'm keeping my long positions and hope VXX one day crawls back towards 20... so much for hedging :)