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VIX Reversal Signal

VIX Reversal Signal

by The MoleAugust 18, 2009

SpeedSkt1 reminded us today that we are close to getting a confirmed VIX reversal signal – thanks mate.

Somehow that little tidbit escaped me today in all the commotion – but that’s the power of collaboration. Alright – for the noobs here again are the rules:

For a $VIX confirmed signal you need 3 things:

  1. a close outside of the 2.0 Bollinger Band (20 day, SMA
  2. a close back inside the 2.0 Bollinger Band – this issues the signal
  3. a higher close (sell) or lower close (buy) than the close of the day back inside the 2.0 Bollinger Band – this confirms the signal.

Once you get those 3 things a major reversal usually occurs within the next week. The sell signals are far more accurate than the buy signals.

I have highlighted to three most recent signals I see and the last two occurred right before this year’s 666 low. I might have to hedge my positions tomorrow if this thing confirms. Also, we painted a very nice 4th wave today – if we drive much higher from here scenario blue is rapidly gaining in probability.

For clarification – if I hedge I will only do until we paint new highs – after that I will unhedge my puts and keep adding positions as we drive higher.



About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
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