The fear indicator VIX spiked on the latest Trump tweets made to torpedo the negotiations with China or made to put them back on track, as he may put it.
The VIX doesn’t look hefty at the moment, but if this extends into a new cascade of bluffing, misunderstanding, and threatening, we may finally see the downturn everyone is waiting for.
We are waiting for it?
Yes. Not because we want it, but because it seems inevitable.
Prices of equity markets are high and the U.S., Europe, and Japan have a monetary experiment running called QE. With interest rates in Europe and Japan close to zero, central banks are with their loose money policies at the limit of their tools. All leading economic blocks have expanded their sovereign debt considerably over the last years. The latest one to accelerate the careless spending is the U.S.
Conclusion: The next global economical downturn may ignite the next financial crash.
And for that we trade the VXX ETF. Look at the daily chart four days after the one above of the VIX index.
After some bad news come out, the VIX often gets nervous for the coming days or even weeks. Most likely accompanied with higher prices of the VXX.
Short term trading systems that may be the entry ticket for the long running monster trend:
Embed these into our general system for getting on the next master trend: