Friday, April 10, 2015

Possible VIX Short chart

Possible VIX Short chart

My VIX chart uses 4 indicators in the upper part of the chart to provide Long and Short signals. When the market is above its 200 day line as it is now, a Short signal is generated when all 4 of the indicators are below their lower extreme readings. This means below 10% for the RSI-2, below 30% for RSI-4, -100 for the CCI, and then 20% for the stochastic. Currently the RSI-2 of the SPX, Dow, and NDX are all overbought at more than 95%, while my index of choice the RUT, is at 76+%. If this setup continues thru the close, I will look to scale into a short RUT position and/or a possible long volaitility trade.

In addition to the 4 upper indicators, the %B is near 0.00, the VIX is almost 10% below its 10 day line, and the VIX is also trading below the 20,1.5 Bollinger Band. The combination of these indicators tells me that volatility is oversold and is likely to revert back to its mean.$VIX&p=D&st=2014-11-01&en=today&id=p33929077182&listNum=1&a=326582706

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