Renewed Trump tariff threats hit markets hard on Oct. 10, 2025. Defensive plays like BTAL, HDGE, CTA, and KMLM outperformed S&P 500 last week as investors sought safety amid rising volatility.
Volatility is currently very cheap, making VXX attractive as a tactical long position rather than a buy-and-hold investment. Seasonality trends and unresolved tariff uncertainties could quickly increase market volatility, supporting a bullish stance on VXX now. VXX offers effective short-term portfolio hedging, especially when volatility is low and macro risks remain unresolved.
I upgrade VXX from sell to hold, reflecting a balance of macro risks and recent volatility trends. Trade war fears, inflation volatility, and rising oil prices are key factors keeping volatility elevated this summer. Technical analysis shows VXX support near $40 and resistance at $60, suggesting a range-bound outlook through summer.
For investors seeking momentum, iPath Series B S&P 500 VIX Short-Term Futures ETN VXX is probably on the radar. The fund just hit a 52-week high and is up 128.09%% from its 52-week low price of $39.98/share.
VXX matches Nasdaq 100 volatility better than SQQQ, making it a superior hedge for tech growth exposures during volatile market conditions. VXN, the CBOE NASDAQ-100 Volatility Index, is a key measure of near-term tech sector volatility, and VXX closely follows its pattern. Growth scare may continue in 2025, at least for the 1st half. Hedge tech growth exposures are recommended to have certain sustainable hedge alternatives like VXX.
iPath® Series B S&P 500® VIX Short-Term Futures™ ETN from Barclays is up 26% since mid-February but is not a buy-and-hold; it's for hedging and speculation. VXX's gains are driven by front-month VIX futures, which spike during market volatility but historically revert, leading to potential losses. Significant put buying signals an interim market bottom, suggesting VXX will likely lose its recent gains as volatility normalizes.
VXX is not suitable for long-term holding due to high roll costs and poor performance; it's only viable for short-term hedging. Market complacency is high, but historical data suggests significant volatility spikes, making precise timing crucial for VXX investments. Current market conditions resemble past periods of high volatility, but diversified portfolios and gold are better hedges than VXX.
The upcoming US election has caused a pause in the S&P 500's uptrend and elevated the VIX, reflecting market uncertainty. Historical patterns suggest implied volatility spikes pre-election but drops post-election, leading to my sell rating on VXX. VXX is a risky, high-cost ETN with significant contango, making it unsuitable for long-term holding.
VXX is an exchange-traded note (ETN), not an ETF, meaning it's backed by Barclays and carries additional bankruptcy risk. The fund tracks short-term VIX futures, making it highly sensitive to volatility changes. VXX typically loses value over time due to the negative roll effect. The August 5, 2024 VIX spike was a rare event, unlikely to repeat soon.
For investors seeking momentum, iPath Series B S&P 500 VIX Short-Term Futures ETN VXX is probably on the radar. The fund just hit a 52-week high and is up 173.7% from its 52-week low price of $39.98/share.