I'm sure many of you already know
VIX
(Volatility Index of the S&P 500) correlates to
SPY
(the S&P 500 micro index). For those who don't and those who do, this is my up to date VIX chart. Please comment what you think! But the general idea is that...
When
VIX
goes up,
SPY
goes down
When
VIX
goes down,
SPY
goes up
This is just one of the many comparisons I take into account when trying to gain a sense of market structure. Never use just one indication or signal to determine a trade. I also like to look at
SPY
vs
DXY
(US Dollar). The general idea is that...
When
DXY
goes up,
SPY
/ stocks go down
When
DXY
goes down,
SPY
/ stocks go up
Again, its important to have multiple things indicating the SAME signal offering high conviction trade ideas. And these "ideas" should be thought of in a way of PROBABILITIES not PREDICTIONS with a predetermined set stop-loss and profit target.
Pay attention to market events and released data, especially the TIME those data reports come out. I honestly look at
SPY
and
VIX
multiple times throughout the week, I do not have them side-by-side during my active trading as they don't perfectly mirror each other on any time frame. It's meant more for a larger timeframe (1H or higher) outlook and trying to gain a broader sense of sentiment in the market.
On that note..
Happy Trading !!
- E
VIX
SPY
DXY
VIX
(Volatility Index of the S&P 500) correlates to
SPY
(the S&P 500 micro index). For those who don't and those who do, this is my up to date VIX chart. Please comment what you think! But the general idea is that... When
VIX
goes up,
SPY
goes down When
VIX
goes down,
SPY
goes up This is just one of the many comparisons I take into account when trying to gain a sense of market structure. Never use just one indication or signal to determine a trade. I also like to look at
SPY
vs
DXY
(US Dollar). The general idea is that... When
DXY
goes up,
SPY
/ stocks go down When
DXY
goes down,
SPY
/ stocks go up Again, its important to have multiple things indicating the SAME signal offering high conviction trade ideas. And these "ideas" should be thought of in a way of PROBABILITIES not PREDICTIONS with a predetermined set stop-loss and profit target.
Pay attention to market events and released data, especially the TIME those data reports come out. I honestly look at
SPY
and
VIX
multiple times throughout the week, I do not have them side-by-side during my active trading as they don't perfectly mirror each other on any time frame. It's meant more for a larger timeframe (1H or higher) outlook and trying to gain a broader sense of sentiment in the market. On that note..
Happy Trading !!
- E
VIX
SPY
DXY