Category Archives: Indicators

Using the VIX for Trade Entry Signals

With the popularity of the VIX and VIX futures being overly used as a volatility hedge, I’ve been thinking about the signals it might give for medium term entry or exit points. If you chart the VIX and overlay Bollinger Bands (20,2,SMA) and look at the SPX, you’ll notice something interesting. Remember the VIX is forward-looking. The other indicators are price biased, and historical.

When the VIX breaks over the upper Bollinger band, you’ll see a low point directional change in the SPX. This isn’t a completely new idea, I was at a seminar recently which looked at combining this with Chandelier as a trading strategy. I’m going to just stick with the Bollinger Bands, the VIX and ATR. That’s where I see the most interesting information.

I mention ATR (Average True Range) because the 1 day ATR helps confirm long entry points.

Everything is in the chart below. The long signals look better than the short signals.

VIX SPX Bollinger

Good Trading.

Changes?

Keeping up a routine has been good for my sanity and my Pre-Market Indicators (PMI’s), have been one way to do that.

I’m going to stop publishing them by hand and work on something a bit more automated, like the Put/Call ratios. My morning indicators are available everywhere and were little interest to readers of Brandnet, yet good for my routine.

I’ll cease boring you with PMI’s and continue to bore you with my random ramblings.

Pre-Market Indicators October 12th, 2012

Good Morning NY.

The CBOE Equity and Index put-call ratios are updated, here. The ratios are strikingly balanced, Equity at .65. It has been lower 39.69% of the time, and Index at 1.14 which only has been lower 29.54% of the time since June 2011.

The markets look green, and feel flat.

On tap: PPI, Core PPI, Michigan Sentiment, Treasury Budget.

  • EURUSD (1.2914) + 0.31%
  • Gold (GC)  + 0.41%
  • Oil (CL) + 1.00%
  • S&P (ES)  + 0.37%
  • CAC40 + 0.65% 
  • FTSE + 0.53%
  • Asia (NKD) + 0.47%
  • Copper (HG) + 0.73%
  • Silver (SI) + 0.48%
  • VIX: Close 16.29
Pre-Market Indicators - PMI111012

Pre-Market Indicators October 11th, 2012

Good Morning NY.

The CBOE Equity and Index put-call ratios are updated, here. The ratios are still interestingly divergent, Equity at .71. It has been lower 63.89% of the time, and Index at 1.02 which only has been lower 14.51% of the time since June 2011.

The markets look green, and feel green.

On tap: Initial Claims, Continuing Claims, Trade Balance, Export Prices ex-ag, Import Prices ex-oil and Crude Inventories.

  • EURUSD (1.2914) + 0.31%
  • Gold (GC)  + 0.41%
  • Oil (CL) + 1.00%
  • S&P (ES)  + 0.37%
  • CAC40 + 0.65% 
  • FTSE + 0.53%
  • Asia (NKD) + 0.47%
  • Copper (HG) + 0.73%
  • Silver (SI) + 0.48%
  • VIX: Close 16.29

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Pre-Market Indicators - PMI101012

Pre-Market Indicators October 10th, 2012

Good Morning NY.

The CBOE Equity and Index put-call ratios are updated, here. The ratios are interestingly divergent, Equity at .73. It has been lower 70.59% of the time, and Index at 1.07 which only has been lower 18.58% of the time since June 2011.

The markets look red, and feels weak.

On tap: MBA Mortgage Index, Wholesale Inventories, Treasury Budget and the Fed’s Beige Book.

  • EURUSD (1.2868) + 0.01%
  • Gold (GC)  – 0.19%
  • Oil (CL)  0.01%
  • S&P (ES)   0.02%
  • CAC40 – 0.07% 
  • FTSE  0.34%
  • Asia (NKD)  1.09%
  • Copper (HG) + 0.03%
  • Silver (SI) – 0.19%
  • VIX: Close 16.37

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Pre-Market Indicators - PMI091012

Pre-Market Indicators October 9th, 2012

Good Morning NY.

The CBOE Equity and Index put-call ratios are updated, here. The ratios are new-normal, Equity at .55. It has been lower 8.39% of the time, and Index at 1.28 which has been lower 44.72% of the time since June 2011.

The markets look flat, and feel flat to green, with earnings season kicking off and Angela in Greece.

On tap: nada

  • EURUSD (1.2951) – 0.13%
  • Gold (GC)  + 0.10%
  • Oil (CL) + 0.95%
  • S&P (ES)  + 0.17%
  • CAC40 + 0.28% 
  • FTSE  0.22%
  • Asia (NKD)  0.85%
  • Copper (HG) + 0.36%
  • Silver (SI) + 0.13%
  • VIX: Close 15.11

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Pre-Market Indicators - PMI081012

Pre Market Indicators October 8th, 2012

Good Monday Morning NY.

The CBOE Equity and Index put-call ratios are updated, here. The ratios are low-new-normal, Equity at .67. It has been lower 48.60% of the time, and Index at 1.03 which has been lower 14.95% of the time since June 2011.

The markets look red, and feel red with no headline movers on tap.

On tap: nada

  • EURUSD (1.2947)  0.67%
  • Gold (GC)   0.59%
  • Oil (CL)  1.57%
  • S&P (ES)  – 0.43%
  • CAC40 – 1.24% 
  • FTSE  0.56%
  • Asia (NKD)  1.18%
  • Copper (HG) – 1.68%
  • Silver (SI) – 1.95%
  • VIX: Close 14.33

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