When the CCI(100) bars are rising and above "0" that indicates rising FEAR.As the bars get shorter the FEAR diminishes.The fear will usually stop at or just above the KC(40). When the VIX overshoots above the KC band that signifies EXTREME FEAR and market BOTTOMS just ahead. >>>NO FUNDAMENTAL DATA ANYWHERE ON THIS CHART.
Comments
mojeauxgrey
⋅
If I understand this correctly and you had bought at Oct 2008 (SPY @ 76-90) when the VIX was at it's peak (you wouldn't know until the following month) you would have missed the real bottom by 5 months. The bottom of the market in 2009 was in March (it's not even circled) with SPY @ 61-68 and you would have had to wait almost a year just to see it come back to that price. This is a good measure of panicking but not of bottoms. If you overlay the SPY you'll see a bunch of false and temporary breakdowns.
nmike
⋅
@mojeauxgrey once there's is an extreme spike you have to wait for CCI to fall and or VIX to fall below 40ma. On smaller spikes you wait for CCI to fall below mid point
mojeauxgrey
⋅
I simply added an overlay of this chart. Even looking at the 2008/9 crash, the indicator is not very clear.
SPY final peak (uninterupted by VIX spiking above KC40) - 5/12/08
VIX crosses KC40 - 9/15/08 SPY down 10%/20%
VIX peak ends where you mark it as "Market Bottom" - 10/27/08 SPY down 40%
Market bottom #1 actually occurs 11/17/08 SPY down 50%.
But this isn't the actual bottom. The dead cat bounce retraces the SPY almost 20% before crashing again.
VIX peaks again at 1/19/09 SPY down to 44%
VIX has a smaller peak at 3/02/09
SPY finally bottoms down 53% off of the 5/12/08 peak.
CCI indeed falls AFTER the 3/02 bottom, but it also fell during the dead cat bounce.
Don't take it personally, but this is a weekly indicator that is off by weeks. I don't see an indicator here for the market bottom, and it probably would have scared the Bejeezus out o me during that dead cat bounce.
mojeauxgrey
⋅
*added SPY as an overlay to this chart...
nmike
⋅
@mojeauxgrey,as a member and moderator of Tradingview I encourage constructive criticism and I'm pleased you brought this to my attention and I hope you continue to do so.We will all be better off in the end.Since this is one of my earliest published charts, either I din't bother to check it with an overlay of SPY or I din't know how to apply an overlay. The basic idea is correct, but yes there is some flaws in it and or not explained properly. Take a look at this chart and let me know what you think
mojeauxgrey
⋅
TY for the response. I'm still learning and am glad you didn't take it personally! :)
Here is what I was looking at - added SPY to your chart. Hope this worked.
tradingview.com/v/9hqs5LlJ/
nmike
⋅
....... FEAR update.......CCI(100) well below mid point.
QuantitativeExhaustion
⋅
Starting to turn over though. Divergence on the daily chart
QuantitativeExhaustion
⋅
CCI (50) on weekly
Databased
⋅
Not sure if everyone has seen this but money.cnn.com/data/fear-and-greed/ is a fantastic measure of fear/greed. Only wish they included better/exportable charts