Noting an interesting feature in the charts... dithering over it...
UVXY spiked in early February, well above the 50 MA.
SQQQ followed with a weak effort that closed the gap with the MA by only half, NOT crossing it.
Now, in early March...
UVXY tested the 50 MA at $10.55 yesterday with a feint higher to peak at $10.31, but failed to cross it... today it peaked below yesterday, at $10.31, and has now fallen back quite a bit... near $9.32.
SQQQ however, crossed the 50MA (near $14) in late February, to peak near $15, fell back below it in early March, now above, again, with a peak near $17, but dropping down to $15.78 now ($15.20 by the time I posted) ... still above the 50MA.
The MACD on SQQQ is turning higher, above the zero line already... while UVXY is barely turning up with little enthusiasm to it...
The reversal, from big UVXY moves in Feb, but suppressed moves now, with suppressed SQQQ moves in February, and bigger moves now... seems a curiosity...
Not immediately obvious to me why they would diverge in that way... other than it perhaps being an indicator of how unready the market participants were to consider declines as likely a month ago... and how ready they are now... so a divergence in the indexes QQQ and VXY being caused by variant divergences in investor expectations... still tied to the same thing in share price potentials, somehow, as change or rate of change in change ? Trump afterglow... giving way to Biden reality check ?
So, being seen dropping the lug nuts causes a twitter... while steady hands know it will be smoothed out ?
But, shouldn't that more responsive price performance in SQQQ now... be the definition of greater volatility? Or, how do you get bigger moves occurring in an index... with less volatility ? Either... SQQQ is coming down again... it does seem to lag UVXY by a day,.,, or it is UVXY that has catching up to do ? Or, it is simply that volatility and price are not related in the way I'm thinking they must and should be at market inflection points ? The uptrend in SQQQ is "non-divergent" from trends in expectations... so up is non volatile ?
In looking at past chart history... the point seems it would be... UVXY has more upside potential if the market crashes... and if it doesn't... also has less downside risk...
Lots of red in the options today... in both issues... not just in the short dates...
Nothing to see here.... move along... at least until Monday... |
