How Can You Determine The Change of Market Trend In About 70% of Cases Using VIX?

Consideration of the VIX strategy developed by Larry Connors.

Baro Virtual
4 min readOct 14, 2021

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Image Credit: Baro Virtual

VIX or Volatility Index S&P 500 can be used by you to coordinate the position’s opening with the market. In this article, we’ll consider another temporary strategy developed by Larry Connors, which has become known as Connors VIX Reversals. It’s used to determine when the entire market (S&P 500) will likely unfold in the opposite direction. Always remember this indicator and use it in addition to your ongoing strategy.

What is the Volatility Index (VIX)?

The volatility index (VIX) measures future volatility. It provides an excellent indication of the level of fear and greed on the market.

Volatility always seeks to return to its average values. This means that periods with high volatility will ultimately be devastated to their average value. Conversely, periods with low volatility, sooner or later, will rise to medium weights.

High figures usually indicate the oversold of the market, and we need to look for opportunities for opening long positions. Low numbers usually occur during market overboughtness, and we focus on short sales. We always work against a market crowd!

See an example for 2 years, as the vertices on the VIX coincide with the depressions on SPY:

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All purchases by VIX
uvxy vxx svxy soxs svix uvix vix futures vq nasdaq nyse cboe vix s&p 500 index volatility options put call stocks Stock Market cnbc short long buy sell ETF tvix dow jones rut russell 2000
All sellings by VIX

There are at least 10 types of turns VIX (so-called CVR signals). We solve 2 of them:

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VIX chart with 10 SMA and RSI (period 5) Indicator

Using a 10-period moving average

The first type offers a 10-period simple moving average (10 SMA on the chart) from the CVR signals under consideration. That is, he reached his minimum and probably…

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Baro Virtual

Market insights. Guest author at Bitcoin Magazine, The Daily Hodl. CryptoQuant.com -based top verified author. Whalemap.io ambassador.

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