This indicator gives a potential "buy signal" using of SPX and together ,
using the following criteria:
SPX Weekly (10) has been BELOW -9 and now rises ABOVE -5
Weekly (10) has been ABOVE +80 and now falls BELOW +10
The background will turn RED when (SPX) is below -9 and ( ) is above +80.
The background will turn GREEN when (SPX) is above -5 and ( ) is below +10.
So the potential "buy signal" is when you start to get GREEN BARS AFTER RED - usually with
some white/empty bars in between...but wait for the green. This indicates that the
has settled down, and the market is starting to turn up.
This indicator gives excellent entry points, but be careful of the occasional false signals.
See Nov. 2001 and Nov. 2008, in both cases the market dropped another 25-30% before the final
bottom was formed. Always have an exit strategy, especially when buying in after a downtrend.
How I use this indicator, pretty much as shown in the preview. Weekly SPX as the main chart with
some medium/long moving averages to identify the trend, added as a "Compare Symbol" in red,
and then the Weekly signals below.
For the graphs, you can show SPX+VIX together , SPX alone, or alone. I prefer to display
them separately because they don't scale well together ( crowds out the SPX when it spikes).
Background color is still based on both SPX / together , regardless of which graph is shown.
Note that there is no data available on Trading View prior to 1990, so for those dates the
formula is using only (SPX) and the assigned thresholds (-9 and -5, or whatever you choose).
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.