ron, analyze the VIX as any other indicator
the "exception" days to the rule have been very strong rallies: Jan 98, Sep 98, Nov 99...., and look at the signal en of Jul 98 on the CCI and the StochRSI: this one was very clear for the ensuing correction. Begin of April 99, both StochRSI and CCI also gave the early warning.
Same early warning early Aug for the rally.
Should test a trading system, but it appears that:
when both StochRSI and CCI are colored the same side of their neutral zone they accurately tell the trend.
You should only stay long while CCI is <-100 and StochRSI <.2.
You should only stay short while CCI is >100 and StochRSI >.8.
In any other circumstance you would be playing roulette.
I am 97% invested as CCI =-113.3 and StochRSI = zero.
I will lighten high volatility stocks when one of the indicators enters neutral zone.
stockcharts.com[W,A]DACLYYMY[DF][PD20,2][VC60][ILD20!LO20]
Hey, I can be wrong also.
And, as Bernie Schaeffer mentionned that OEX options volumes are down almost to 10% of their volume some years ago, I am looking for another sentiment indcator as this VIX thing becomes less representative of the market. |
