Thursday, April 15, 2010

VIXEN Scale Views

Top chart is the Qs on 130 minute bars (3 bars per trading session), while the lower chart is 5 minute bars of the NYAD. Both have the VIXEN overlay in place . . and the technical implications of both charts are bullish.
I often use the 130 minute charts to get an arms length look at the market dynamics. At this level you can see whether relative strength was at the open or close while at the same time getting a marco view of trend momentum. The lower panel technicals, especially the 3 SMAs are also useful for trend confirmation. While we've used the VIXEN setup almost exclusively for daytrading purposes in previous posts, keep in mind that the VIX cross tactic was originally developed based on an analysis of daily bars. And, while the VIX is currently trading at sub-16 levels, the 130 minute chart provides no hint that we're anywhere near favorable short trades. Keep in mind that the VIXEN setups virtually never catch the absolute tops and bottoms of the cycle . . what they do is signal truly "sweet spot" trades with extremely low risk exposure . . and at this juncture we just have to bide our time on new shorts.
The NYAD chart below is just a microcosm of the Qs chart above. Those who follow and trade the VIXEN setup know that the VIX/prices crosses "float", . . that is, they move along the chart as time proceeds. In this regard, the actual VIXEN trigger on Wednesday's NYAD chart was 10:30, which coincides exactly with the NYADs early reversal off of the early swoon.
It doesn't get much clearer than this.

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