#VIXindicator I created this in 2015 after having a bad day of losses. I wanted to find a warning that would fire at least a few days in advance to warn us to watch our step when playing the market neutrally. I used data from 2000 to 2015, and the signal did work pretty decently for about 4 years. But since the pandemic it has not been very helpful. It has lagged the market worse and worse each year and now seems to fire too late almost every time. I will keep the right-hand sidebar widget updated (this the “semi” before retirement) but won’t refer to it in the top widget or in separate posts. Feel free to ask any questions!

#VIXindicator Clearly there’s a new standard of $VIX behavior that is rendering these signals meaningless.

#VIXIndicator. The drop in futures and at the open has canceled the Upside Warning that never was. I noted on Friday that it was the first time I’d seen a $VIX spike high enough to cancel the UpW on the same say that we closed low enough to fire the UpW. That was our clue that this one was not to be.

#VIXindicator Today was the first time I remember the intraday $VIX peak exceeding 25% above the 2-dat low, a signal that normally cancels an Upside Warning, followed by the day’s close firing the UpW. But we could be poised for another push higher in the coming days.

#VIXindicator Provided we don’t get a surprise $VIX spike today, the close will kill the Downside Warning under 16.05.

#VIXindicator As if that wasn’t obvious. Been awhile since I’ve seen an intraday move that sharp.

#VIXindicator This UpW started AFTER the election week bump, so its first days were actually the next week’s pullback. But we then got the run from 5853 to all time high 3 cents short of 6100 on Dec 6th. Since then its been a choppy ride until today’s collapse. Downside Warning triggered if we close above 18.36 on $VIX.

#VIXindicator Since early October the $VIX remained stubbornly high despite the indexes hovering near all-time highs. The election released the tension and caused a massive collapse in the VIX, and now we get the Upside Warning at new all-time highs. This means we likely have higher to go in the coming days or weeks.

#VIXIndicator. New $SPX high means the DW is canceled. That may be the fakest headfake I’ve ever seen this indicator produce. I don’t know why $VIX is so high, but can only guess it has to do with the trader uncertainty about how fast rates will come down, which seems to be a silly fear given the strength of just about everything right now.

#VIXindicator The high $VIX close on Monday was over 50% higher than the recent low of 14.90. This fires the Downside Warning. The last one fired on Sept 3rd and was only good for an additional 2% down over 4 days.

#VIXindicator. Afternoon surprise… despite the volatility last week the Upside Warning survived. Not today. A Downside warning will take effect if $VIX closes above 22.34.

#VIXindicator The last Upside Warning fired on Aug 13 when SPX was 6% above the latest low, and peaked on Aug 26 at 10.4% above the low, so it caught over 4% of upside. Currently the SPX is 6% above the Sept 6th low.

#VIXindicator The Downside Warning was canceled at the open, due to the SPX exceeding 5651, which was the high between the last Upside & Downside warnings.

#VIXindicator Just need a $VIX close below 16.46

#VIXindicator The high $VIX close on Tuesday signals a likelihood of lower indexes in the coming days or weeks.

#VIXindicator $VIX above 18.74… if we close above it we will be in Downside Warning.

This Upside Warning lasted three weeks and at the high last Monday was good for +217.19 on $SPX, or about +4%.

#VIXindicator Expect higher levels in the market over the coming days or weeks.

#VIXindicator This cancelation comes with an asterisk*…. the Fib retracement of recent $VIX low and high was abnormally high (22.42) due to Monday’s extreme VIX high over 65. Based on past performance, I still believe this signal is likely to work, but perhaps just less likely than normal. The recovery after Monday was remarkable, so Monday was probably just a temper tantrum and we will now resume the steady tick higher.

#VIXindicator We touched on a new low on Friday of 10.62, but it seemed like some anomaly and I thought it might be corrected. But it remains on the charts, which means the upside warning was actually canceled on that same day, when VIX hit 50% above that low, and closed that way which would have meant a Downside Warning. Now that we see the activity this week, that warning is solid.

But in any case, we just hit over 50% of the previous 11.52 low (May 23rd), so now the Upside Warning is officially canceled.

Measuring from the 10.62 low, if we close above 15.93 it will mean a downside warning.

#VIXindicator After three consecutive $VIX closes below the 78.6 Fib retracement line, expect the likelihood of higher market over the coming days or weeks.

#VIXIndicator The $VIX closed below 14.32 on Friday, ending the Downside Warning. Closes like this on Monday and Tuesday will fire an Upside Warning.

#VIXindicator Barring an afternoon volatility spike, looks like Downside Warning will be canceled as the $VIX took a big plunge before the open on the Jobs report. This could put us in an Upside Warning as early as Tuesday’s close.

#VIXindicator Fired at the close with $VIX over 50% higher than its recent low of 12.40 on 3/21. Expect the possibilities of lower levels over the coming days or weeks.

#VIXindicator This fired at the close today. It comes after the last one was canceled on Feb 13th, but with no Downside Warning in the interim. So it may not be as strong, but don’t be surprised at more movement higher.

#VIXindicator The $VIX has spiked 25% over the 2-day closing low of 12.93. If we close above 16.16 this will trigger a Downside Warning.

#VIXindicator Third consecutive $VIX close below the 78.6% retracement means an Upside Warning. Expect possibility of higher market in coming days or weeks.

The last time this fired was September 1st, and it was a dud; the market did not get higher at all over the 16 days until it was canceled. Here are the recent results of the UpW’s before that:

July 14, 2023: close on that day: 4,505. Subsequent high was 4,607 on July 27. 9 trading days, +2.3%
June 5, 2023: close on that day: 4,274. Subsequent high was 4,458 on June 30. 18 trading days, +4.3%
Mar 30, 2023: close on that day: 4,051. Subsequent high was 4,187 on May 1. 21 trading days, +3.4%
Nov 23, 2022: close on that day: 4,027. Subsequent high was 4195 on Feb 2. 47 trading days, +4.2%
Aug 5, 2022: close on that day: 4145. Subsequent high was 4325 on Aug 16. 7 trading days, +4.3%
Mar 29, 2022: (failed) close on that day: 4631. SPX did not go higher. UpW was canceled after 6 trading days, 0.0%
Dec 27, 2021: close on that day: 4791. Subsequent high was 4818 on Jan 4. 6 trading days, +0.6%
Oct 18, 2021: close on that day: 4486. Subsequent high was 4743 on Nov 22. 14 trading days, +5.7%
Aug 25, 2021: close on that day: 4496. Subsequent high was 4595 on Sep 2. 6 trading days, +1.1%
Aug 13, 2021: (headfake) close on that day: 4468. Subsequent high was 4480 the next day. Canceled the day after that.
May 28, 2021: close on that day: 4204. Subsequent high was 4393 on July 7. 31 trading days, +4.5%
Mar 15, 2021: close on that day: 3969. Subsequent high was 4238 on May 7. 40 trading days, +6.8%
Feb 5, 2021: close on that day: 3886. Subsequent high was 3950 on Feb 16. 6 trading days, +1.6%
Nov 11, 2020: close that day: 3585. Subsequent high was 3726 on Dec 18. 25 trading days, +3.9%

#VIXindicator Tuesday’s close was over 50% higher than the recent $VIX low of 12.68, triggering a Downside Warning.

#VIXindicator That was the worst Upside Warning since 2001, according to my back testing. It fired on Sept 1st, and never went higher. We’ve had false signals more recently, but most of them are canceled in a couple days. This one managed to last 16 days.

Today’s close should fire a Downside Warning, but that signal has been even weaker than the Upside one in last few years. So have we already found the bottom? We are now back to early June levels, which is where the current head & shoulders pattern on the $SPX daily chart began. It’s one of the most classic reversal patterns, so if it holds to tradition we have farther down to go.

#VIXIndicator An Upside Warning took effect at the close Friday after three consecutive closes of $VIX below the 78.6 Fib line drawn from pre-correction low and correction high. This could mean higher prices in coming days or weeks.

This is the FOURTH Upside Warning we’ve seen WITHOUT any intervening Downside Warnings. That’s the first time that has happened in the 20+ years of tracking this indicator.

Here is data on last several Upside Warnings.

July 14, 2023: close on that day: 4,505. Subsequent high was 4,607 on July 27. 9 trading days, +2.3%
June 5, 2023: close on that day: 4,274. Subsequent high was 4,458 on June 30. 18 trading days, +4.3%
Mar 30, 2023: close on that day: 4,051. Subsequent high was 4,187 on May 1. 21 trading days, +3.4%
Nov 23, 2022: close on that day: 4,027. Subsequent high was 4195 on Feb 2. 47 trading days, +4.2%
Aug 5, 2022: close on that day: 4145. Subsequent high was 4325 on Aug 16. 7 trading days, +4.3%
Mar 29, 2022: (failed) close on that day: 4631. SPX did not go higher. UpW was canceled after 6 trading days
Dec 27, 2021: close on that day: 4791. Subsequent high was 4818 on Jan 4. 6 trading days, +0.6%
Oct 18, 2021: close on that day: 4486. Subsequent high was 4743 on Nov 22. 14 trading days, +5.7%
Aug 25, 2021: close on that day: 4496. Subsequent high was 4595 on Sep 2. 6 trading days, +1.1%
Aug 13, 2021: (headfake) close on that day: 4468. Subsequent high was 4480 the next day. Canceled the day after that.
May 28, 2021: close on that day: 4204. Subsequent high was 4393 on July 7. 31 trading days, +4.5%
Mar 15, 2021: close on that day: 3969. Subsequent high was 4238 on May 7. 40 trading days, +6.8%
Feb 5, 2021: close on that day: 3886. Subsequent high was 3950 on Feb 16. 6 trading days, +1.6%
Nov 11, 2020: close that day: 3585. Subsequent high was 3726 on Dec 18. 25 trading days, +3.9%

#VIXindicator In updating my charts today, I see that I missed the cancelation of the Upside Warning last Thursday, August 3rd, when the $VIX spiked over 25% than the 2-day closing low. I have updated the information on the sidebar to the right.

#VIXindicator After a break of only 6 trading days, the Upside Warning is back on, meaning a likelihood of higher market over the next days or weeks. That is TWO consecutive cancelations of the Upside Warning that were NOT followed by a Downside Warning.

#VIXindicator The Upside Warning was canceled today when $VIX spiked 25% above Friday’s close. It went into effect on June 5th, when the close was 4,273.79. The subsequent high of 4,458.48 was on Friday, a 4.3% increase.

#VIXindicator The $VIX just hit a new low, exceeding the low from Friday and touching its lowest level since February of 2020.

#VIXindicator An Upside Warning went into effect at the close on Monday, meaning probable upside to the market in coming days or weeks. This one comes after the previous UpW was canceled on May 2nd, but no Downside Warning resulted. The market chopped around for a month but stayed fairly strong.

#VIXindicator The Upside Warning, which went into effect on March 30th, was canceled today when $VIX spiked above 19.73, which is 25% above Friday’s close.

This UpW produced a 3.4% increase from the SPX close on March 30th to yesterday’s high of 4,186.93.

If we close with VIX above 19.73 it will mean a Downside Warning.

#VIXIndicator An Upside Warning took effect at the close today after three consecutive closes of $VIX below the 78.6 Fib line drawn from pre-correction low and correction high. This could mean higher prices in coming days or weeks.

Here is data on last several Upside Warnings.

Nov 23, 2022: close on that day: 4,027. Subsequent high was 4195 on Feb 2. 47 trading days, +4.2%
Aug 5, 2022: close on that day: 4145. Subsequent high was 4325 on Aug 16. 7 trading days, +4.3%
Mar 29, 2022: (failed) close on that day: 4631. SPX did not go higher. UpW was canceled after 6 trading days
Dec 27, 2021: close on that day: 4791. Subsequent high was 4818 on Jan 4. 6 trading days, +0.6%
Oct 18, 2021: close on that day: 4486. Subsequent high was 4743 on Nov 22. 14 trading days, +5.7%
Aug 25, 2021: close on that day: 4496. Subsequent high was 4595 on Sep 2. 6 trading days, +1.1%
Aug 13, 2021: (headfake) close on that day: 4468. Subsequent high was 4480 the next day. Canceled the day after that.
May 28, 2021: close on that day: 4204. Subsequent high was 4393 on July 7. 31 trading days, +4.5%
Mar 15, 2021: close on that day: 3969. Subsequent high was 4238 on May 7. 40 trading days, +6.8%
Feb 5, 2021: close on that day: 3886. Subsequent high was 3950 on Feb 16. 6 trading days, +1.6%
Nov 11, 2020: close that day: 3585. Subsequent high was 3726 on Dec 18. 25 trading days, +3.9%

#VIXindicator I didn’t notice this until this morning, but futures are certainly showing it. The Downside Warning was canceled at the close yesterday with the $VIX low below 20.00.

#VIXindicator Fired at the close with $VIX over 25% higher than its two-day closing low.

Here are recent Downside Warnings for reference:
Fired 9/23/22, at the SPX close of 3,693.23. The SPX low of 3,491.58 was 14 trading days later (-5.5%)
Fired 4/22/22, at the SPX close of 4,272. The SPX low of 3,637 was 39 trading days later (-14.9%)
Fired 2/11/22, at the SPX close of 4,419. The SPX low of 4,115 was 8 trading days later (-6.9%).
Fired 1/20/22, at the SPX close of 4,483. The SPX low of 4,223 was 2 trading days later (-5.8%).
Fired 11/26/21, at the SPX close of 4,585. The SPX low of 4,495 was 5 trading days later (-2.0%).
Fired 9/20/21, canceled quickly but fired again on 9/28/21, at the SPX close of 4,353. The SPX low of 4,278 was 4 trading days later (-1.7%).
Fired 8/18/21, at the SPX close of 4,427. The SPX low of 4,368 was the next day, so another FALSE warning (-1.3%).
Fired 7/19/21, at the SPX close of 4,258. The SPX low was also that day, so this was a FALSE warning.
Fired 5/11/21, at the SPX close of 4,152. The SPX low was the next day at 4,056, so basically a FALSE warning. It dipped again 5 trading days after that to 4,061, then recovered from there(-2.3%).
Fired 2/25/21, at the SPX close of 3,829. The SPX low of 3,723 was 5 trading days later (-2.8%).
Fired 1/27/21, at the SPX close of 3,750. The SPX low of 3,694 was only 2 days later (-1.5%).
Fired 9/3/20, at the SPX close of 3,455. The SPX low of 3,209 was 3 weeks later on Sep 24th (-7.1%).

#VIXindicator Well, yesterday was not an anomaly. Drop continues, I will be stopped out, and the Upside Warning in effect since late November was just canceled with the $VIX spiking higher.

#VIXindicator After peaking at 4100 on Dec 13th, $SPX made a hammock on a pullback. But the Upside Warning was never canceled. Now it is coming through with a new high on SPX and new low on $VIX.

#VIXIndicator An Upside Warning took effect on Wednesday after three consecutive closes of $VIX below the 78.6 Fib line drawn from pre-correction low and correction high. This could mean higher prices in coming days or weeks.

Here is data on last several Upside Warnings.

Aug 5, 2022: close on that day: 4145. Subsequent high was 4325 on Aug 16. 7 trading days, +4.3%
Mar 29, 2022: (failed) close on that day: 4631. SPX did not go higher. UpW was canceled after 6 trading days
Dec 27, 2021: close on that day: 4791. Subsequent high was 4818 on Jan 4. 6 trading days, +0.6%
Oct 18, 2021: close on that day: 4486. Subsequent high was 4743 on Nov 22. 14 trading days, +5.7%
Aug 25, 2021: close on that day: 4496. Subsequent high was 4595 on Sep 2. 6 trading days, +1.1%
Aug 13, 2021: (headfake) close on that day: 4468. Subsequent high was 4480 the next day. Canceled the day after that.
May 28, 2021: close on that day: 4204. Subsequent high was 4393 on July 7. 31 trading days, +4.5%
Mar 15, 2021: close on that day: 3969. Subsequent high was 4238 on May 7. 40 trading days, +6.8%
Feb 5, 2021: close on that day: 3886. Subsequent high was 3950 on Feb 16. 6 trading days, +1.6%
Nov 11, 2020: close that day: 3585. Subsequent high was 3726 on Dec 18. 25 trading days, +3.9%

#VIXIndicator $VIX closes at 22.36, ending the Downside Warning that started on Sept 22. If we get two more days closing under 22.50, it will mean an Upside Warning. Not surprising as Thanksgiving week is usually mildly bullish. And $SPX was actually down on the day… but volatility dropped steadily.

#VIXIndicator Almost got the Downside Warning canceled on Friday. Closed $VIX at 22.52, needed 22.49. Next week should tell us whether the near term direction will continue higher or reverse lower.

#VIXindicator A warning fired at the close today with the $VIX over 29.00. The last warning in April took 39 trading days before reaching the market low, about a 15% drop. Before that, this warning was not a great indicator in 2021, with many small drops & short-lived drops. This time, we have been dropping for weeks and it took awhile to finally fire.

Here are recent Downside Warnings for reference:
Fired 4/22/22, at the SPX close of 4,272. The SPX low of 3,637 was 39 trading days later (-14.9%)
Fired 2/11/22, at the SPX close of 4,419. The SPX low of 4,115 was 8 trading days later (-6.9%).
Fired 1/20/22, at the SPX close of 4,483. The SPX low of 4,223 was 2 trading days later (-5.8%).
Fired 11/26/21, at the SPX close of 4,585. The SPX low of 4,495 was 5 trading days later (-2.0%).
Fired 9/20/21, canceled quickly but fired again on 9/28/21, at the SPX close of 4,353. The SPX low of 4,278 was 4 trading days later (-1.7%).
Fired 8/18/21, at the SPX close of 4,427. The SPX low of 4,368 was the next day, so another FALSE warning (-1.3%).
Fired 7/19/21, at the SPX close of 4,258. The SPX low was also that day, so this was a FALSE warning.
Fired 5/11/21, at the SPX close of 4,152. The SPX low was the next day at 4,056, so basically a FALSE warning. It dipped again 5 trading days after that to 4,061, then recovered from there(-2.3%).
Fired 2/25/21, at the SPX close of 3,829. The SPX low of 3,723 was 5 trading days later (-2.8%).
ired 1/27/21, at the SPX close of 3,750. The SPX low of 3,694 was only 2 days later (-1.5%).
Fired 9/3/20, at the SPX close of 3,455. The SPX low of 3,209 was 3 weeks later on Sep 24th (-7.1%).

#VIXindicator Turned out I made an error on Friday… wasn’t watching the numbers closely enough, but there was no Downside Warning. Despite the big drop, the $VIX action wasn’t as strong as you might expect and fell short of the 27.23 close required to fire the Warning. That level is still in effect today as a closing trigger.

#VIXindicator If $VIX closes at 24.45 or higher it will be Downside Warning.

#VIXIndicator An Upside Warning took effect on Friday after three consecutive closes of $VIX below the 78.6 Fib line drawn from pre-correction low and correction high. This could mean higher prices in coming days or weeks.

Here is data on last several Upside Warnings. The only one in 2022 completely failed, and overall the signal has not performed as strongly since 2020.

Mar 29, 2022: (failed) close on that day: 4631. SPX did not go higher. UpW was canceled after 6 trading days
Dec 27, 2021: close on that day: 4791. Subsequent high was 4818 on Jan 4. 6 trading days, +0.6%
Oct 18, 2021: close on that day: 4486. Subsequent high was 4743 on Nov 22. 14 trading days, +5.7%
Aug 25, 2021: close on that day: 4496. Subsequent high was 4595 on Sep 2. 6 trading days, +1.1%
Aug 13, 2021: (headfake) close on that day: 4468. Subsequent high was 4480 the next day. Canceled the day after that.
May 28, 2021: close on that day: 4204. Subsequent high was 4393 on July 7. 31 trading days, +4.5%
Mar 15, 2021: close on that day: 3969. Subsequent high was 4238 on May 7. 40 trading days, +6.8%
Feb 5, 2021: close on that day: 3886. Subsequent high was 3950 on Feb 16. 6 trading days, +1.6%
Nov 11, 2020: close that day: 3585. Subsequent high was 3726 on Dec 18. 25 trading days, +3.9%

#vixindicator After 97 days, looks like the Downside Warning is canceled. Amazon’s earnings popped the market higher after the bell, driving the $VIX down below 22.34 (by a penny) before its official closing time at 4:15pm.

#VIXIndicator A double warning as $VIX closed 25% above Wednesday’s close AND 50% above the the recent low of 18.45 from April 4th.

#VIXindicator Another run bites the dust.

#VIXIndicator A likelihood of higher levels in coming days or weeks.

#VIXindicator Based on the $VIX close under 21.17, the Downside Warning is canceled. It first went into effect on January 20th, was canceled on Feb 9th, only to be reinstated only two days later on Feb 11th.

The arrow on this chart shows last time it was canceled. (Feb 9th).

So while it is usually a pre-cursor to an extended rally, the better sign will come with an Upside Warning, which will require two more CONSECUTIVE closes below 21.17.

So much for Wednesday’s headfake. #VIXindicator

#VIXIndicator So the last UPSIDE warning was kind of a bust… let’s see if we get another shot this time. Two more consecutive $VIX closes below 21.17 will trigger it.

#VIXindicator At the close we are exceeding 50% above the Jan 4th VIX low of 16.34.

#VIXIndicator Yes, it was. In the premarket, $VIX peaked at 22.07, just above the 22.03 level which cancels it. This, after two weeks of volatility which couldn’t quite get it canceled.

Market behaviors change over time, and it seems the VIX may have outgrown the constraints of my indicator.

#VIXindicator This is probably the biggest drop I’ve seen since creating this indicator wherein an Upside Warning has not been canceled. It may be time to look at some of the rules and whether the behavior of $VIX and market over past couple years calls for some tweaks.

#VIXIndicator Santa has arrived.

#VIXindicator It is sometimes the case that a spike in the VIX that triggers a second or third warning is a capitulation move signaling the end of volatility. Perhaps that’s what happened on Monday, and we’re now cleared for a Santa Claus rally?

#VIXindicator Just in time for the holidays!

#VIXIndicator Another brief and shallow correction in the books as we look poised to march higher.

#VIXIndicator Pre-market $VIX high of 28.02. All we needed for cancelation was 22.10.

#VIXIndicator Feels like it’s a few days late but it still should mean more upside in the coming days or weeks.

#VIXindicator So we never got much of a drop but it certainly was choppy for a few weeks. $VIX closes tomorrow and Monday below 18.49 will mean an Upside Warning.

#VIXindicator

….too bad it got canceled on Friday. This has been the Summer of Swings for the #VIXindicator.

#VIXindicator Another dud. This is becoming less reliable… need to find another signal to go with the $VIX highs that would indicate a more likely chance of downside follow through.

#VIXindicator Let’s see if this one has more depth than the recent head fakes we’ve been getting.

#VIXIndicator $VIX finally showed some gumption this morning. Likely downside warning coming at the close.

#VIXindicator In one of the most whipsawy periods I can remember, the Downside Warning was canceled with a new SPX high today.

#VIXIndicator, well that got ugly fast and became one of the briefest UpW’s in history. At least I collected great profits on yesterday’s swings.