VXX Forming a Larger-Degree Bottom

Yesterday we finally saw some upside action on the iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) after trading flat for several days. 

Unfortunately, we still do not have a 5-wave move up off of the lows, and thus we still do not have confirmation that we have struck a bottom just yet. 

Now, given where we are in the larger degree structure this initial move up does not have to start with a 5-wave structure; however, not getting a 5-wave move would certainly make tracking the upside action on this much more difficult. 

Furthermore, not seeing a full 5-wave move leaves the door open to still seeing another low prior to forming a significant low. 

So, with all of that said, I am still looking for a move through the 24.97 high to give us an initial signal of a larger-degree bottom. Unless and until that level is broken, I still cannot rule out seeing another low prior to bottoming. 

If we do see that low then I would still ideally want to see the 22 level hold, as seeing a sustained move through that 22 area would open the door to this forming a more bearish structure, which potentially could see this into the mid-to-low teens prior to striking a long-term bottom.

For now, however, and as long as we do not see that sustained break of the 22 area, I do still prefer to count this as forming a larger-degree bottom.  Once that bottom is struck, I am looking for a fairly sharp move back towards the 33 area as an initial target.

VXX 60
VXX 60
Michael Golembesky is a senior analyst at ElliottWaveTrader covering US Indices, the US Dollar, and the VIX. He contributes frequently to Avi's Market Alerts service at EWT while also hosting his own VIX Trading service.