VXX Rally Pointing Higher

In overnight trading, the iPath S&P 500 VIX ST Futures ETN (VXX) hit the upper end of the near-term target zone at the 32.95 level, and now has clearly confirmed five waves up off of the August 1 low. 

Ideally, that overnight high was only the top of micro wave iii on the 1-min chart, with wave v on that short-term pattern pointing to 33.35.

If we do get that final wave v up, the next question of course is whether we're still in the green wave (iv) or if this the start of a larger move having already bottomed per the red path labeled on the 5-min chart. 

As I noted yesterday I still have issues with the bottoming pattern into the July 27 low, so as long as we are under the 33.33 - 34.45 zone I still have to slightly lean towards this being in the green wave (iv) on that chart.

But should the VXX move through that zone, I will then likely adopt the case that we have already struck a bottom at the July 27 low. 

In either case, I still would prefer to see another micro high to finish off wave C of (iv), but a move back down through the 31.88 level would be the initial signal that we may have already struck a top in that green wave (iv). 

VXX 1
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VXX 5
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VXX  60
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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.