VIX Index Retracements After Spikes & How To Find Support

CBOE Volatility Index - VIX - Daily versus SPY (S&P500 SPDR)

Sharp DROPS IN VIX have always been RE-TESTED

1. Look for sharp drop in VIX after a spike (Note: This is usually accompanied by a rally in stocks)
2. As soon as there is a 75% retracement of VIX, mark the level of stock prices.
3. The market will revisit this level once the short-covering euphoria is over.
4. See all examples. The last one completely blew up.

So, It looks like this is a very reliable read on VIX and what it means for the future of the S&P500.

Tim 3:03PM October 21, 2014

NOTE: THIS DATA IS ONLY THROUGH YESTERDAY'S CLOSE - FOCUS ON THE OLD SIGNALS