#MarketTiming — In the world of $UVXY wedgies rule… — 11/21/2024

THE UVXY STRATEGY

UVXY is an EFT used to allow traders to take advantage of short-term volatility in the market and quickly profit on market sell-offs.

It is based on the VIX, or rather VIX futures, in order to provide a 1.5 times leverage on the index.

It runs opposite, often in lockstep, to the general market so when the market dives, UVXY flies, and vice versa — when the market rises UVXY plummets.

THE SWING TRADE

It is known for sudden swings to the upside (see the chart below) in which the gains are fast and furious, and often times those profits can die just as quickly.

In other words, it is great for swing trading but only when the timing is right.

In addition, it has a consistent technical pattern that gives a head-up to when these moves in UVXY, and in the market, are about to happen.

THE FALLING WEDGES

The UVXY price pattern likes to work itself into falling wedges again and again (see the chart below). A falling wedge is well recognized in technical analysis, even as the price is declining, as bullish pattern.

I have written about this several times in years gone by — HERE and HERE.