Keep an eye on the Volatility Index (VIX), we said on February 4.
In fact, we highlighted opportunity in the:
ProShares Ultra VIX Short-Term Futures ETF (SYM: UVXY) — The ETF was designed to match two times (2x) the daily performance of the S&P 500 VIX Short-Term Futures Index. When the VIX pops, the UVXY typically follows.
On February 4, the UVXY traded at $19. Today, it’s up to $28.30.
iPath S&P 500 VIX Short-Term Futures (SYM: VXX) — The VXX ETN provides exposure to the S&P 500 VIX Short-Term Futures Index.
On February 4, the VXX traded at around $44. It’s now up to $58.52.
ProShares VIX Short-Term Futures ETF (SYM: VIXY) — ProShares VIX Short-Term Futures ETF provides long exposure to the S&P 500 VIX Short-Term Futures Index, which measures the returns of a portfolio of monthly VIX futures contracts with a weighted average of one month to expiration.
On February 4, the VIXY traded at around $43. It’s now up to $57.15.
All after the Trump tariffs were reportedly worse than expected. “Reciprocal doesn’t sound so bad. Then, when people actually saw what the numbers were — 10% across the board and in many cases much higher — it became very tangible for them. And down we went,” said Steve Sosnick, chief market strategist at Interactive Brokers, as quoted by MarketWatch.com.
In addition, Wedbush analyst Dan Ives characterized the announcement as “worse than the worst-case scenario” adding that “While there are many details to be worked out and investors will focus on the specifics over the coming 24 hours, the jaw-dropper was the China reciprocal tariff of 34%. Taiwan at 32% is the other major one along with the E.U. at 20%.”
Unfortunately, if the Dow continues to fall at this pace, it could break below support at 40,000, with a potential near-term test of 38.500.
It’s why we’re still pounding the table over the UVXY, VXX and the VIXY ETFs.
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