How to Predict VXX Stock Price Trends

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Quite by accident, we've found what looks like a pretty good way to predict VXX stock price trends — up, down, top and bottom — using a 10-Run Moving Average, 10RMA. A run is 1 or more consecutive days of VXX closing price the same direction as the previous day — up or down.

Smoothing and plotting the runs data series since Jan 2011 with a 10-run moving average 10RMA, results are uncanny (See Charts below). This may be our most significant research observation using 10RMA to predict VXX price trends.

We stumbled onto this trying to understand the unusually high occurrence of 5-day runs compared to 4 and 6-day runs in Table 1 below.

DIY 10RMA Calculation of 10RMA is so simple you can do it yourself on the back on an envelope — No calculator or computer needed. I'd make 6 columns: Date, Runs, 10RMA, +, (-), and VXX.. See data in Chart 3 how to go from here. Post links to pictures of your envelopes in Comments, and I'll post your pictures here. Frog winner prize. Money in your envelope appreciated too, please :)

NOTE A message link to this page hit Google #1 of 133,000 less than 5 hours from posting this page here today, May 15, searching How to Predict VXX Stock Price Trends. Our goal —
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Chart 4, Chart 622-b from here, showing effect of (+) and (-) Runs 10RMA on VXX 10-Run Moving Averages (10RMA).

One possible signal, a leading indicator, that the current VXX crash may be bottoming out will be when 10RMA crosses 0, (-) Runs 10RMA reaches -0.7 and (+) Runs 10RMA exceeds 0.7. See X-axis = 119 for the last time a VXX down trend bottomed out.

See this Chart updated June 22 here Chart 622-b

Chart 4, Chart 22 from Runs, showing effect of (+) and (-) Runs 10RMA on VXX 10-Run Moving Averages (10RMA). One possible signal, a leading indicator, that the current VXX crash may be bottoming out will be when 10RMA crosses 0, (-) Runs 10RMA reaches -0.7 and (+) Runs 10RMA exceeds 0.7. See X-axis = 119 for the last time a VXX down trend bottomed out.

Chart 3, Chart 622-b from here , Chart 2 with Runs data showing how VXX 10-Run Moving Averages (10RMA) and VXX change with Runs.

See this Chart updated June 22 here Chart 622-b

Chart 3, Chart 21 from Runs, Chart 2 with Runs data showing how VXX 10-Run Moving Averages (10RMA) and VXX change with Runs. Shows how well VXX 10-Run Moving Averages (10RMA) predict VXX price trends UP, DOWN, TOP, BOTTOM, and some peaks and valleys. When 10RMA crosses zero, VXX price trend change from + to (-) and vice versa. Data plotted from Feb 9, 2011 to May 9, 2012.

Chart 2, Chart 622-b from here, includes data

See this Chart updated June 22 here Chart 622-b

Chart 2, Chart 1 with data, Chart 19 from Runs, shows how well VXX 10-Run Moving Averages (10RMA) predict VXX price trends UP, DOWN, TOP, BOTTOM, and some peaks and valleys. When 10RMA crosses zero, VXX price trend change from + to (-) and vice versa. Data plotted from Feb 9, 2011 to May 9, 2012.

Chart 1, Chart 622-b from here, shows how well VXX 10-Run Moving Averages (10RMA) predict VXX price trends UP, DOWN, TOP, BOTTOM, and some peaks and valleys. When 10RMA crosses zero, VXX price trend change from + to (-) and vice versa. Data plotted from Feb 9, 2011 to May 9, 2012.

See this Chart updated June 22 here Chart 622-b

Table 1 showing the unusually high occurrence of

5-day runs compared to 4 and 6-day runs.

Jan 3, 2011 to Apr 10, 2012, 320 days

Run

Run
Runs # Runs Days
%VXX
# Runs Days %VXX
1 29 29 -80.91 34 34 123.92
2 11 22 -81.60 23 46 152.59
3 11 33 -92.32 4 12 47.37
4 5 20 -62.03 2 8 30.85
5 8 40 -132.24 6 30 135.73
6 2 12 -30.80 1 6 21.22
7 4 28 -60.79

70 184 -540.69 70 136 511.69

Aug 8, 2012

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