Stock Market Volatility Pops Higher Ahead Of Nvidia Earnings, Jackson Hole Symposium: This Fund Offers 1.5X Leverage

Author: Melanie Schaffer | August 22, 2023 01:43pm

The ConvexityShares Daily 1.5x SPIKES Futures ETF (NYSE:SPKY) was spiking up almost 1% higher Tuesday, possibly confirming a new uptrend, which Benzinga pointed out was likely to happen on Monday.

The move was coming in tandem with an upward swing in the S&P 500 VIX Short-Term Futures Index (CBOE: VIX), which was moving inversely to the S&P 500 ahead of Nvidia Corporation’s earnings print and the Jackson Hole Symposium.

SPKY is a 1.5x leveraged fund, which tracks the SPIKES Futures Short-Term Index and measures volatility in broad-based equities in a similar way to ProShares Ultra VIX Short Term Futures ETF (NYSE:UVXY), which tracks the movement of the VIX.

For every 1% daily movement in the SPIKES Futures Short-Term Index, the SPKY fund seeks to move 1.5%, meaning that it’s for short-term trades and should not be held for a long period of time.

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The SPKY Chart: SPKY was working to form a bullish Marubozu candlestick on Tuesday, which could indicate higher prices will come on Wednesday. If that happens, Tuesday’s low-of-day will serve as a higher low, which will confirm a new uptrend.

• If a new uptrend is confirmed, bullish traders will want to see the ETF rise above the recent higher high, which was formed on Friday at $6.29, over the next few trading days. If SPKY falls lower on Wednesday, Tuesday’s price action may serve as a bull trap and the ETF could retrace toward the $5 mark.
• Momentum in SPKY has been steadily rising, with the ETF’s relative strength index (RSI) increasing from the 27% mark on July 27 to about 57% on Aug. 17. Although SPKY’s RSI has recently dropped down to near the 50% mark since then, the rising momentum indicates an increased interest in the ETF.
• SPKY has resistance above at $5.59 and at $6.68 and support below at $4.97 and at $4.55.

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Posted In: SPKY UVXY