I had to google "handle" I have a bad tooth infection today so just messing about. One of the blessings/curse of my relatively self-taught futures trading is a tenancy to stick with what works for me, blind to other possibilities. I've observed a number of guys integrating VIX into an intraday swing style (not hedging though) but without much success. The FIO Spoos thread was full of it. I guess a couple had a grip on using VIX well. I had for a while a strong bias indication from Tick/TickQ (not sure) worked out however like the VIX seemed for others it gave poor signals. Being a simple minded thing, I prefer just watching a bunch of instruments and judging market bias from there. It is always interesting to see the various second insights to viewing the indexes and how others have connected say stock trading earnings or triple witchings etc. into their futures decision process.
Here's the graph of *reality* -- that yellow trend line represents a 2-year top-of-candles marker, with ~20pts of headroom on it. It's 'angle' is not dissimilar from the 2-3 years prior to that, either. It had a total of ~1 week where it hit/exceeded the yellow line. Thus, in keeping with a multi-year GROWTH trend, we should be peaking at ~2680 right now -- a goodly 165 points, 5.8% ABOVE the expected. But so what -- take a look at the diff between the ever-declining IV, and HV: Want to guess where (if difficult, still...) reliable money was made?? Want to guess where ("Oi!") a ferocious crush was had?? {Hint: I was so sublimely THANKFUL at Thanksgiving this year -- having no idea that Mr. Market had slipped my testes into a vice, and was going to be screwing it down over the next 6 WEEKS.} I honestly do not know if this current growth of IV (OR, the growth of the IV-HV difference) is a back-to-normal thing or not. Frankly, I'm too busy: simply harvesting credit spreads and assuming a Reversion-to-Mean market is NOT going to do it, for as long as this regime lasts. So, I work. {"Work" right now means: madly scrambling to develop trade protocols for credit→debit spread transitions, for positions rolled on the fly.} What I *don't* want to do, is walk blithely into a trend/debit-spread Whipsaw buzz-saw. But right now??? VIX and VXST ~12-handle????? I'm a'doin' BACKFLIPS. I'd love to go tick-scalping right now.....
Take a hot shower, and direct lots of water from your ear to your collarbone. You will be AMAZED at the difference. RIGHT NOW!!
Well, while I appreciate much of what Neuroway was/is posting, my dissent was made in rueful recognition of too many times having "nowhere to go." I mean -- think about it: we're giggling happy at a 12 vol, ignoring the fact that 12 is 20%-40% below historic norms of 15-20. I mean, that's just whacky. (Until you live it. Which, "Hey!", here we are, all livin' it. Hoooo boy. )
SPX == 2842 10% == 284pts. Correction in SPX == 2558 200-day Moving Average: 2515 We could have a 10% drop today, and still be 43pts, 1.70%, above the 200-day MA. Jeeeeeez.