As we cross into SPX 1000 territory today, the VIX continues to confound most traditional technical analysis by posting gains.
And, while it would be easy to dismiss this statistical anomaly as the product of underlying put buying there's another approach to using the VIX that I've profiled many times before and it works even when the VIX is acting out like an unruly child who refuses to behave.
We're looking at a 2 minute chart of the Qs with the VXN overlaid as a line (white) study.
Below the Qs chart is a chart of the NYAD on a similar time frame with the VIX overlaid.
In the top chart I've used the red and green trend lines to reflect the VXN implied momentum of the Qs.
In the lower chart I've used the red and green trend lines to signify the trend of the NYAD.
Note in particular the VIX/VXN crosses generated at 13:00 in both the Qs and the NYAD.
These crosses will always keep you on the right side of the trend and help avoid those otherwise frustrating whipsaws that can easily drive a trader to distraction.
Just another setup to log into your technical trading toolbox.