for those of you who've been around for a while, the VIX closed
outside of it's bollinger bands on Tues, then closed back inside
them on Wed, that was a buy signal for the SPX. It's been
very reliable at least for a short term trade, of course played out
today, but the system doesn't tell you how long the trade will
be.
I noted mcHugh mentioned it the past couple days. In fact he
said that this time it should be taken with a grain of salt since
the last 2 bearish ones really didn't play out as expected.
Man when I saw that I wished I was 500% long as McHugh has a
habit of being stupid at just the right moment.
As Matt said, signal doesn't say how long the rise will
last...stay alert and nimble.
.....another example of what I mean by backtest. 2 does not make
a trend and is no sample size at all. You need to analyse the
signal/system/strategy over a period of at least 20-30 occurances
and see what performed well and what didn't and what were the
prevailing market conditions at the time.
For example you might find the VIX BB Buy Signal performs well
when VIX % is above 25 and not so well when its below 25. You then
have a trading edge versus playing outright the simple approach
which is relatively widely known
That VIX indicator with Bollinger Bands has been discussed here
forever, most who've been here for a while should know about it.
However that said we were looking for an oversold bounce
anyway to at least form a wave B or a triangle etc, yes today's
hard gap up and bounce was maybe more then some expected so
quickly, but I expected a bounce higher, so many charts were at
their 50 day MAs and trendlines, so it shouldn't be too much of a
surprise that the market bounced today. I've been saying the
last two days to lock in some profits on Shorts and I even had some
longs.
Now we'll see where it goes from here. I still think based
on the charts that the market won't go to new highs from here, not
without more chopping around and consolidation
VIX buy signal was yesterday
Posted by matt on 18th of Nov 2010 at 11:15 am
for those of you who've been around for a while, the VIX closed outside of it's bollinger bands on Tues, then closed back inside them on Wed, that was a buy signal for the SPX. It's been very reliable at least for a short term trade, of course played out today, but the system doesn't tell you how long the trade will be.
Vix signal
Posted by perthx on 18th of Nov 2010 at 11:23 am
I noted mcHugh mentioned it the past couple days. In fact he said that this time it should be taken with a grain of salt since the last 2 bearish ones really didn't play out as expected.
Man when I saw that I wished I was 500% long as McHugh has a habit of being stupid at just the right moment.
As Matt said, signal doesn't say how long the rise will last...stay alert and nimble.
Dutchman --see your inbox
.....another example of what I
Posted by vimal on 18th of Nov 2010 at 11:28 am
.....another example of what I mean by backtest. 2 does not make a trend and is no sample size at all. You need to analyse the signal/system/strategy over a period of at least 20-30 occurances and see what performed well and what didn't and what were the prevailing market conditions at the time.
For example you might find the VIX BB Buy Signal performs well when VIX % is above 25 and not so well when its below 25. You then have a trading edge versus playing outright the simple approach which is relatively widely known
Not a pop at you but just an illustration
Besides...I am not a McHugh permabear fan!
That VIX indicator with Bollinger
Posted by matt on 18th of Nov 2010 at 11:28 am
That VIX indicator with Bollinger Bands has been discussed here forever, most who've been here for a while should know about it. However that said we were looking for an oversold bounce anyway to at least form a wave B or a triangle etc, yes today's hard gap up and bounce was maybe more then some expected so quickly, but I expected a bounce higher, so many charts were at their 50 day MAs and trendlines, so it shouldn't be too much of a surprise that the market bounced today. I've been saying the last two days to lock in some profits on Shorts and I even had some longs.
Now we'll see where it goes from here. I still think based on the charts that the market won't go to new highs from here, not without more chopping around and consolidation
How come that wasn't pointed
Posted by dutchman on 18th of Nov 2010 at 11:17 am
How come that wasn't pointed out yesterday