VIX Reversal Signal
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:
- a close outside of the 2.0 Bollinger Band (20 day, SMA
- a close back inside the 2.0 Bollinger Band – this issues the signal
- 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.