If this rally has legs – which I’m not sure it does – volatility will reverse off lofty highs of 34 in a hurry.
The last time it fell from this level, it plummeted from just above 34 to 28 in no time at all. In fact, we profited from that last reversal with gains on the VXX March 32 put and gains on the Velocity Shares Daily Inverse (XIV) stock.
Let’s see if we can do that again.
Consider buying the Velocity Shares Daily Inverse (XIV) again up to $31.
And consider buying to open the VXX March 2015 31 put up to $4.05.
Also, the other day we issued a buy recommendation on the UNG April 2015 14 put up to $1.90. While it opened well above that after initial recommendation, it finally pulled back under $1.85 yesterday. It’s still a buy on excessively oversold natural gas.
We’ll talk again soon. Until then, take good care.
Ian L. Cooper
Inside Value Trader