vix tool (idea)

Orios

New member
i have no idea how to use/do think script, but here's some trade logic i use day to day. if someone can translate that into code.. it could help clear a lot of mud as far as when to get bullish and when to get bearish.

vix operates in 3 modes. its flat, inverted, and normal
-roughly 80% of the time vix stays in its normal state
-roughly 15% goes into an inverted/backwardated state
-roughly 5% it goes into a flat state.
- when vix goes inverted, its showing that the near term demand for protection is elevated
- this is why when markets tends to jump out the window down, but the escalator up

idea:
so there's 3 components that matter here, vix cash (vix index), vix futures month 1, vix futures month 2

the challenge:
vix normal : vix cash below vix month 1 futures but month 1 is less than month 2 (color green)

vix flat: vix cash slightly below or equal to vix month 1 but less than month 2 (color yellow)

vix backward: vix cash above vix futures month 1 (orange) but less than month 2. vix cash above vix futures month 1 and month 2 (color red)
 
@BenTen well real time if you want to watch whats happening in the market

vix cash is the dashed line -------------
m1 is month 1.
m2 is month 2.
its how most futures markets operate. i only say month 1 month 2 because thats what retail etp's focus on in their holdings/swaps

That brings up a new challenge. These Futures roll every month
 
@Orios Not even sure what you want. Just playing around but does this look like anything. Supposed to be VIX and Month VIX.
2020-01-31-TOS-CHARTS.png
 
@Orios Not even sure what you want. Just playing around but does this look like anything. Supposed to be VIX and Month VIX.
2020-01-31-TOS-CHARTS.png


sorta kinda. its not based on price action, the relation between futures months and actual demand market abroad. i use that site to watch it maybe i just need to invest in another monitor? lol
80% of the time things are orderly/spx drift up. but 15-20% of the time spy takes a major dump based on demand for protection. usually the curve will flatten before inverting in vix.
so when it flattens you have a preemptive warning the market is about to turn bearish
 
@BenTen so real time vix futures curve is flat but still slightly inverted. so from a trading stand point this is where bearish momentum has a extremely likely chance to strike. im short the market based on the vix term structure still showing protection in the near term is in demand.
 
Gonna have to hardcode the /VX month structure to view this strat historically but you can get away with using VIX/VIX9D/VIX3M unless someone else knows otherwise.
 
hello, thank you, question your chart says LOOK for BUYS is that referring to something like SPY when it says Trigger new buys now?
I think I changed the "SPY," to "QQQ," as it's the leading indicator of Tech, but should be one or the other.....and yes, it's a timing tool.....
 

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