Let’s take a look at a seven-month chart of iPath S&P 500 VIX ST Futures ETN (NAR: VXX), which tracks the S&P 500 VIX Short-Term Futures Index Total Return and reflects the implied volatility of the S&P 500 Index at various points along the volatility forward curve.

The VXX offers inverse exposure to the broad S&P 500 basket of stocks. Basically, when stocks go up, the VXX goes down, and vice-versa. It is far from a perfect inverse relationship, however, which can be frustrating to traders who may wonder why they didn’t make money when the markets dropped.

A quick look at the chart shows that VXX has been trending bearish over the last 6 weeks as the market has trended sharply bullish. The ETN has breached $17.32 intraday on several occasions over the last 4 trading sessions, which is a level of support established on several occasions towards the end of 2015. As of end of day Monday, the VXX closed right at that point. Below that $15.50 serve as a strong level of support.

In terms of resistance, $20.40 looks to be the next point. The over/under range of 20.40/17.32 might seem like a big one for the near-term, but as the VXX serves as an (imperfect) proxy for the VIX volatility index itself, it’s a range that can quickly be taken out, though more likely towards the bullish side than the bearish.

VXX PayDayCycle Status right now remains at -3, as today ended pennies below Friday’s close. It also marks the 7th day of a bearish cycle.

PayDayCycles are 4-8 day trends in stocks that help people swing trade. To learn more about PayDayCycles make sure to grab the free Swing Trading Class on the right sidebar.

Using the new Winning Streak tool, we see that the average bearish Winning Streak for VXX, when it’s below both the 50-day and 200-day Moving Average, is 5.0 days. (This is according to data going back for the last 10 years.) Based on this, there is a slightly above-average chance that the next couple of days could see price gains in VXX.

The MACD, as highlighted by the gold oval at bottom of the chart, ended the day as a green bar. Though it did end below the zero line, where it’s been since mid-February, it continues to hug the line, as it has over the last 5 days. No clear indication of momentum, in other words.

Overall, it looks like VXX is probing below a previously strong support level, and the next few days will see if it gets rejected there. However, the VXX probably will drop a short way if it breaks through support, but a rejection could see it rise quickly.

Trade safe!