I don't believe in these ^vix tracking etn's. Decay/contango etc essentially strip the value. However, I do place large buys in vxx/tvix every so often (bi-annually on average) when the idicators that I respect, well, indicate.
Volatility annually is generally a 10 month loser out of the 12 in a year. The Fed's QE program essentially killed the ^vix and the corollary ^vix tracking products by backstopping the market.
This all said, margin debt is an indicator I revere. $507B in margin debt as of the end of April (figures released this morning). That's a historical record again (we have been setting these for a while now). But thats not the most important part. The most important is that it jumped a staggering 7% since the previous reading in March- that is eyebrow raising. In fact, its plausible that margin debt is considerably higher than that since May's reading wont be out until July 1st. Net cash meanwhile is at a historical low negative $227B. Take into consideration that there is indeed more liquidity since the 2007 top when margin debt was about $390B yet net cash was at $0 then. The ratio on that is another historical feat.
Essentially when selling starts it is going to be exacerbated by $227B in compulsory covers. When the ^vix wakes up it explodes. A 100% gain in the ^vix occurs at least once a year. Yes, it then decays for the rest of the year in the Fed backstopped market but I don't see any risk buying vxx/tvix anymore right now. None, even if it continues to decay. I see the ^vix testing 25 this summer and vxx above $30 sometime this summer as well.
Many articles about the unreliability of Dow Theory are out now and I wont let those stop me from protecting my money by going in cash. Don't believe the nonsense about 'too much bearish sentiment'. There isn't any. Look at call to put ratios. Until the puts outweigh the calls and the ^vix is well above 15 there is no veracity to that claim.
The only thing worse than losing what you have would be to sell now and miss a big spike. You would regret that one forever.
80:20 rule- start buying when near 20% of potential downside. I see oil potentially breaking $40 (just so the hedges et al can say "told ya so") to $38-$39 but briefly. I think even the worst of the bears on this board see oil within 20% of a bottom here. The short positions in oil are massive and will take a while to unwind.
Personally, I'm down huge as I bought mostly last fall. Down about 37% which is currently worse than my losses were in March of 2009! LOL. Too, you eluded to "capitulation" and I'm seeing it right now everywhere. Do not sell now. You held this long you can a take a little more.