Well nice to see it worked as the previous dow andvix charts suggested...
VIX opened -ve and trended down till it broke the 33 level mentioned in the previous post closing the day down -2.80 at 31.67...
DOW on the other hand opened up and spent most of the session consolidating above 8500 and trying to take 8550 (mentioned in the previous post as possible intraday resistance), till last hour when it performed a 70 point rally to take the 8550 resistance and close the day up +100 at 8574...
The stregth of the VIX fall taking 33 without hesitation and the last dow bounce taking 8550 as well as the reversing indicators are suggesting further falls for VIX and rises for the DOW more likely tomorrow...
The significant levels to watch are still those mentioned in previous posts, for the VIX watch 33 as resistance and 30 as main support levels, if it does manage to take 30 a reversal of the DOW fall as of 9k could be confirmed and we may get set for a Christmas rally... we need to see 30 taken first though and keep in mind that it is a tough one to take...
For the dow on the upside all 00 levels are possible resistance with 8700 being the most significant one... on the downside we got 8550, 8500 and 8470 to watch...
Riz
VIX opened -ve and trended down till it broke the 33 level mentioned in the previous post closing the day down -2.80 at 31.67...
DOW on the other hand opened up and spent most of the session consolidating above 8500 and trying to take 8550 (mentioned in the previous post as possible intraday resistance), till last hour when it performed a 70 point rally to take the 8550 resistance and close the day up +100 at 8574...
The stregth of the VIX fall taking 33 without hesitation and the last dow bounce taking 8550 as well as the reversing indicators are suggesting further falls for VIX and rises for the DOW more likely tomorrow...
The significant levels to watch are still those mentioned in previous posts, for the VIX watch 33 as resistance and 30 as main support levels, if it does manage to take 30 a reversal of the DOW fall as of 9k could be confirmed and we may get set for a Christmas rally... we need to see 30 taken first though and keep in mind that it is a tough one to take...
For the dow on the upside all 00 levels are possible resistance with 8700 being the most significant one... on the downside we got 8550, 8500 and 8470 to watch...
Riz
Attachments
DOW moved up and down a lot, but didnt move one way or another much in the end, still closed the day up +14 at 8589...
VIX in the mean time though recouping muchof the initial fall ended the day down -0.27 at 31.40...
So both in line with our previous comments though only just...
The over all picture hasnt changed much so it still looks up for dow and down for vix tomorrow... significant vix levels to watch 33 and 30, as for dow 8550 and 8600 immediate support and resistance with 8500 and 8700 further levels...
Been a while since I started this thread, I tried to learn and improve my knowledge on VIX and hoped it would be helpful for those fellow members unfamiliar with market volatility analysis... I hope it did serve its purposes as this is the last update of this thread... catch you on others
Riz
VIX in the mean time though recouping muchof the initial fall ended the day down -0.27 at 31.40...
So both in line with our previous comments though only just...
The over all picture hasnt changed much so it still looks up for dow and down for vix tomorrow... significant vix levels to watch 33 and 30, as for dow 8550 and 8600 immediate support and resistance with 8500 and 8700 further levels...
Been a while since I started this thread, I tried to learn and improve my knowledge on VIX and hoped it would be helpful for those fellow members unfamiliar with market volatility analysis... I hope it did serve its purposes as this is the last update of this thread... catch you on others
Riz
Attachments
Thanks Greg, Dsmodi...
Greg, you can also have a separate vix chart or one with vix overlayed on whatever market you're trading... for swing trading vix break can often be quite helpful, esp. when watched with trin if intraday... any further questions you can always pvt me or just post here, good luck...
Riz
Greg, you can also have a separate vix chart or one with vix overlayed on whatever market you're trading... for swing trading vix break can often be quite helpful, esp. when watched with trin if intraday... any further questions you can always pvt me or just post here, good luck...
Riz
Vix
Hi, I have started trading in the last six months-so a newbie. I trade over the longer term 1-4 weeks (DOW & Dax) as this gets rid of the terrible quotes from brokers.
The Vix is meant to show the volatility of the market ie the higher the Vix the more fear (therefore sell) and the lower the Vix the more greed (therefore buy), but I find the opposite-once Vix hits 50 and above it's a good time to buy and 28 and below a good time to sell
This works for me over the long term. This seems opposite to what is usually said, if a the Dow or S&P chart or put against a Vix chart over 6 months it seems to be the case
The move doesn't happen instantly (2-3 days) so you need a large stop
If this has already been stated in the very long thread apologies
Hi, I have started trading in the last six months-so a newbie. I trade over the longer term 1-4 weeks (DOW & Dax) as this gets rid of the terrible quotes from brokers.
The Vix is meant to show the volatility of the market ie the higher the Vix the more fear (therefore sell) and the lower the Vix the more greed (therefore buy), but I find the opposite-once Vix hits 50 and above it's a good time to buy and 28 and below a good time to sell
This works for me over the long term. This seems opposite to what is usually said, if a the Dow or S&P chart or put against a Vix chart over 6 months it seems to be the case
The move doesn't happen instantly (2-3 days) so you need a large stop
If this has already been stated in the very long thread apologies
Hi Raziel,
Your words "the higher the Vix the more fear (therefore sell) and the lower the Vix the more greed (therefore buy)" are correct and this is the basis of the volatility analysis... of course we are talking about direction here, it means when VIX is going up market goes down and vice versa... also saying when vix hits 50 or above it is a good time to buy (and vice versa) does not contradict it, because when you see VIX at or above 50 you think it is the top and cant go any further up, so it is going to go down from here on and that is why you buy... that means you buy expecting VIX to go down, becuase it's topped... so you are still acting in line with VIX (next possible) direction... just like other indicators and even the market VIX turns and changes direction at some point and you act in anticipation of it or after it starts...
Just like when RSI or stochastics or any other such indicators are topped, you tend to sell, because you expect them to go down from there...
Hope this helps clear the question, and please do not hesitate to ask further if it hasn't..
Riz
Your words "the higher the Vix the more fear (therefore sell) and the lower the Vix the more greed (therefore buy)" are correct and this is the basis of the volatility analysis... of course we are talking about direction here, it means when VIX is going up market goes down and vice versa... also saying when vix hits 50 or above it is a good time to buy (and vice versa) does not contradict it, because when you see VIX at or above 50 you think it is the top and cant go any further up, so it is going to go down from here on and that is why you buy... that means you buy expecting VIX to go down, becuase it's topped... so you are still acting in line with VIX (next possible) direction... just like other indicators and even the market VIX turns and changes direction at some point and you act in anticipation of it or after it starts...
Just like when RSI or stochastics or any other such indicators are topped, you tend to sell, because you expect them to go down from there...
Hope this helps clear the question, and please do not hesitate to ask further if it hasn't..
Riz
vix
Hi ,
I have only started reading the vix thread recently and I must say I have found it very helpful as it gives a very good insight on how
volatility works.
I think more members should post and share their views as it gives the newbies confidence to incorporate new ideas and trading strategies into their own trading.
Valuable members like Riz should be encouraged and given freedom to express their views more.
Looking forward to your new posts on other threads Rizz.
Demon
Hi
,I have only started reading the vix thread recently and I must say I have found it very helpful as it gives a very good insight on how
volatility works.
I think more members should post and share their views as it gives the newbies confidence to incorporate new ideas and trading strategies into their own trading.
Valuable members like Riz should be encouraged and given freedom to express their views more.
Looking forward to your new posts on other threads Rizz.
Demon
Thought it'd help to draw attention to VIX as it seems to be at the crossroads and market moves been tricky lately last example of which on Friday when most traders expected a big tank on very bad data but the Dow soon recovered and signalled strength right after the knee jerk reaction...
Starting with VIX we now have 3 most significant levels to watch 25/6, 30/1, 35/6... there have been a few times when vix went for 36 only to fail and fall off it, despite forming double/W bottom at 30 it failed to take 36 to finally break down the last consolidation between 30-36 and head for its lowest level since June 02, 26 has been tested a few times last one and a half months it has held sucessfully so far, only the last time failed to get a proper bounce off it and it is still at 27.13 suggesting 26 still not out of the woods... breaking down this significant level should signal another 5 points vix fall to 20 which in turn suggests near term strength and rallies for the market...
Another significant developments with VIX is the death cross of moving averages which occurred in the first session of this year right after VIX had another failed attempt at 36... another strong signal that VIX failing to take highs and tends to take lows instead... as far as I remember this happened last time in Dec 2001 and VIX ended up to test 19 twice before heading back to highs...
Dow on the other hand having held the 8300 level successfully (for non-regular readers of this thread please see Post ID: 19660 of this thread when this level first mentioned as significant support) is signalling strength and not far from its 200MA which it tested and failed in the end of November... despite the indicators signalling o/b on the daily chart and bad data as well as warmongering adding doom and glum to the sentiment, DOW has surprisingly held well with its 20MA crossing over 50MA also at the beginning of the year, this and the weakness in VIX that is the market volatility index are suggesting DOW should at least retest its 200MA in the short time to either form a d/t there and start a mid term down trend or provide a golden cross and signal further big rallies also mid term...
This of course is the likelihood I read from Dow and vix charts, we should still keep in mind that talks of wars hanging over the market undermining any convincing TA analysis... a time traders should take most care... good luck
Riz
Starting with VIX we now have 3 most significant levels to watch 25/6, 30/1, 35/6... there have been a few times when vix went for 36 only to fail and fall off it, despite forming double/W bottom at 30 it failed to take 36 to finally break down the last consolidation between 30-36 and head for its lowest level since June 02, 26 has been tested a few times last one and a half months it has held sucessfully so far, only the last time failed to get a proper bounce off it and it is still at 27.13 suggesting 26 still not out of the woods... breaking down this significant level should signal another 5 points vix fall to 20 which in turn suggests near term strength and rallies for the market...
Another significant developments with VIX is the death cross of moving averages which occurred in the first session of this year right after VIX had another failed attempt at 36... another strong signal that VIX failing to take highs and tends to take lows instead... as far as I remember this happened last time in Dec 2001 and VIX ended up to test 19 twice before heading back to highs...
Dow on the other hand having held the 8300 level successfully (for non-regular readers of this thread please see Post ID: 19660 of this thread when this level first mentioned as significant support) is signalling strength and not far from its 200MA which it tested and failed in the end of November... despite the indicators signalling o/b on the daily chart and bad data as well as warmongering adding doom and glum to the sentiment, DOW has surprisingly held well with its 20MA crossing over 50MA also at the beginning of the year, this and the weakness in VIX that is the market volatility index are suggesting DOW should at least retest its 200MA in the short time to either form a d/t there and start a mid term down trend or provide a golden cross and signal further big rallies also mid term...
This of course is the likelihood I read from Dow and vix charts, we should still keep in mind that talks of wars hanging over the market undermining any convincing TA analysis... a time traders should take most care... good luck
Riz
Attachments
The pattern suggesting a potential downside break for VIX and upside break for the Dow failed...
VIX failed to take 25/6, one of the 3 most significant levels 25/6, 30/1, 35/6 to signall a downside break... instead it bounced off it to head for next significance level, 30/1, and got back to the recent consolidation range...
In the mean time Dow having failed to cross over its 200MA headed down sustainably only to stop around its 50% retracement of the rally starting in December 30th and speeding up in the first session on the new year... so instead of taking the highs Dow pulled down considerably... the current level is also potential support if Dow is to stop falling before bactesting 8300...
The Dow daily chart showing a potential H&S which if forms will suggest a bounce here to form the right shoulder and either head back down to break the neckline or keep going up to take highs... That is one pattern to watch in the mid term... the flip side is if this level also doesnt hold, Dow is most likely going to backtest the 8300 significant level, this is also mid term...
VIX on the other hand needs to take 30/1 level to head up to have another go at 35/6 or if the bounce fails to take 30/1, fall back for another test of 25/6...
Unless VIX and Dow breaks those significant levels, it seems to be range trading of a few hundred points for Dow and 5 to 10 for VIX....
Riz
VIX failed to take 25/6, one of the 3 most significant levels 25/6, 30/1, 35/6 to signall a downside break... instead it bounced off it to head for next significance level, 30/1, and got back to the recent consolidation range...
In the mean time Dow having failed to cross over its 200MA headed down sustainably only to stop around its 50% retracement of the rally starting in December 30th and speeding up in the first session on the new year... so instead of taking the highs Dow pulled down considerably... the current level is also potential support if Dow is to stop falling before bactesting 8300...
The Dow daily chart showing a potential H&S which if forms will suggest a bounce here to form the right shoulder and either head back down to break the neckline or keep going up to take highs... That is one pattern to watch in the mid term... the flip side is if this level also doesnt hold, Dow is most likely going to backtest the 8300 significant level, this is also mid term...
VIX on the other hand needs to take 30/1 level to head up to have another go at 35/6 or if the bounce fails to take 30/1, fall back for another test of 25/6...
Unless VIX and Dow breaks those significant levels, it seems to be range trading of a few hundred points for Dow and 5 to 10 for VIX....
Riz
Attachments
<Rizz> <Rizz> One indicator that needs to be watched closely from here on is VIX. Its pierced through it mid term resistance level of 35/6 which it filed to break and settle above a few times last 3 months, if it succeeds to head for 40-45-50 levels this time, it will suggest the market got a lot more to lose, on the flip side if it fails this level again and falls back below, we will most likely see some sharp correction from here up...
