Using 3 SD bollinger bands and VIX for buy signals

SP:SPX   S&P 500 Index
3483 18
This is a setup for identifying buy signals in the market, particularly for S&P 500 . The indicators we are using here are Bollinger Bands and the Volatility index, VIX .
In the chart above, I have shown two bollinger bands with different settings - one with 2 Standard Deviations from the MA and the other with 3 Standard deviations away from the MA. To get the buy signal, we will use the outer bollinger bands , which is the 3 standard deviations BB.
The buy signal is trigger when the S&P 500 index hits the lower band of the 3 SD bollinger band and the VIX peaks. For VIX , there is no particular level it should cross, but a relatively high peak, compared to the previous mini-peaks, will be a good signal.


nice work! do you have an update for this method for the last two sell-offs (aug 2015 and jan 2016?
Be mindful of hindsight bias - it is dangerous.
+1 Reply
seine timwest
thank you i will
Welcome to the TradingView community! I just wanted to add that defining the peak of VIX is always a challenge and especially so if you use "close-only" charts. Either way, I hope you can post the specific signals as they happen so we can see one work in "real-time", without the hindsight bias. There are other signals in the chart that didn't work (were early at calling a bottom)
Seine, your buy events line up almost perfectly with another scenario I've found. I have applied the following strategy successfully to SPY, QQQ, and IWM.
Setup: TSI 3,9,3 , Bollinger Bands overlaid on the TSI at 20,2 , MA 50 overlaid on the TSI, chart set to weekly.
Two buy events are indicated with this TSI setup.
Buy events: 1. The TSI moves outside of the lower BB, buy when the TSI upward through the lower BB. 2. The TSI moves below 0.00, buy when the TSI crosses 0.00 moving upward.
Sell: Sell when the TSI crosses its 50 period MA.
seine BrandonMendez
Awesome. Thanks a lot for sharing. Can you put this on a chart and attach the link here? It's just nice to see everything on the chart.
I'm new to TradingView and I don't think I can create the setup in TradingView. I have a screenshot of the setup in FreeStockCharts. How can I get it to you?
seine BrandonMendez
Please send it to my email.
Thank you so much.
Hi, How do I get the VIX on the chart?


+1 Reply
seine lenbclark
Type VIX and look for CBOE volatility index. This is not in the indicator but on the chart section.
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