"VIX, a powerfull tool to use on SP500" by ThinkingAntsOk

CBOE:VIX   Volatility S&P 500 Index

-Today we are going to show Vix Index on daily chat compared to SP500 (orange line).
The first thing we noticed is the Wedge formations on the chart.

-As Vix starts going down, SP500 keeps rising, the concept is that people trust on the strength of the bullish trend , on this process we can see the Wedge patterns on VIX , and bullish trends on SP500 .

-To see the Wedge 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 bullish movement on SP500 and you see that is about to face a major resistance zone and you observe that the bullish trend 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 Wedge 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 bearish confirmation to start thinking on bearish setups.

-Why should I look for bearish setups?
Because that means that people is starting to have fear of a possible bearish movement that’s the reason VIX is making new highs and has broken the Wedge pattern, we should complement this by seeing bearish candlesticks on SP500 with high volume on them.

-Conclusion: see on the pictures how Vix preceded the beginning of the two previous bearish 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.
Thinking Ants.
A platform entirely created to improve Traders development.
Interest, as I trade the S&P, however, after reading it a few times...I can't follow it...can you say more? For example, what do you see right now on the S&P? Price is bullish and hitting a resistance zone...
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