-Today we are going to show Vix Index on daily chat compared to SP500 (orange line).
The first thing we noticed is the formations on the chart.
-As Vix starts going down, SP500 keeps rising, the concept is that people trust on the strength of the , on this process we can see the patterns on VIX , and trends on SP500 .
-To see the Pattern we only need to draw a line between the higher lows on VIX .
-OK great! But how can I do something with this?
-Let’s see it on this way, imagine you have been following a movement on SP500 and you see that is about to face a major and you observe that the is losing strength.
When you detect this, you are going to Focus you attention on the VIX chart, and you are going to ask yourself the next question.
-Is price inside the Pattern or is about to break out?
-If the price has broken out the structure and SP500 is on a Major reversal zone, then, that’s a strong confirmation to start thinking on setups.
-Why should I look for setups?
Because that means that people is starting to have fear of a possible movement that’s the reason VIX is making new highs and has broken the pattern, we should complement this by seeing on SP500 with high on them.
-Conclusion: see on the pictures how Vix preceded the beginning of the two previous trends with a breakout signal.
-Complementing charts is always a good way of making your setups more solid.
*Please note that the above perspective is our view on the market, We do not give signals and take no responsibility for your trades.
A platform entirely created to improve Traders development.