I didn't sell my position in the VXX, and that may prove wise. As of today, the Dow Industrials failed to attain a new high, and the transportation average did. This means an intermediate correction is on the way. The size of this correction depends on the behaviour of the indexes on a weekly basis.
So here's the next thing to watch for. On the weekly charts, the Dow industrials and the transportation average are neutral. The bull market is thus still in tact when viewed from a weekly basis. If there is a breakdown on the weekly charts, we'll know it because the transportation index will continue to surge while the dow falls. Should this happen, you will want to ensure you are short the market.
For now, I remain pessimistically long, because there's an outside chance that this daily behaviour will produce nothing more than a small correction that will quickly find support.
This is getting exciting!
