Here we go again with yesterday's Qs/VIXEN action. While the Vixen gave just a hint of the 12:30 bullish setup, the consolidation of price and VIX from 13:00 - 14:00 was a nice level platform for a break. . .one way or the other. I personally find these extended areas of flatline activity attractive trading opportunities as the next price action move is an either/or situation that typically extends for at least 30 minutes and often much longer.
The bullish surge at 14:00 was telegraphed by the change in slope in both the SMA and MACD signal lines. While the signal didn't generate a cross (really bullish) the fact they were tracking parallel was a definite positive indicator.
Just before 15:00 the VIX executed a clear 90 degree reversal, followed quickly by a 90 reversal in the Qs price action. Depending on your stance at the time this was a clear long cover/short signal that tracked right into the close. Those that were hesitant about the bear VIX signal were given a clear second chance to go short 30 minutes pre close when he parabolics fired a SELL and the SMA and MACD signal lines showed a bear cross.
For the past week I've been hanging out in the Market Rewind chat room with a few other technically oriented blogger/daytraders as we monitor chart action and possible trading setups. The room is free and I'm kind of getting my feet wet there before deciding if I want to run my own. The VIXEN has been adopted by several of the group and (so far) the signals generated have been impressive.
As mentioned previously, the VIXEN's dynamic scaling issue is the only sticky issue that has to be dealt with on a platform by platform basis. The trick is to monitor the VIX on 1 (a bit jumpy) or 2/3 minute bars that only reference the current day. This means adjusting the range of your lookback, which I otherwise typically set on my 2 minute charts to 4 days. This takes a bit of experimentation, but once you get the settings locked down, the signals are very precise.