Most likely. Ken Fisher of Fisher Investments, http://www.fi.com/ has done the research written about this. His Forbes columns are always a good read. Trader/God
Your absolutely correct that the VIX is not a predictive indicator of future index direction. I don't think you meant to say there's no "correlation" though. Clearly there is. I'd say volatility EOD moves counter price about 85% of the time. However as you note that means nothing. It would be like someone using the slope of a moving average as an indicator and remarking, "look everytime the market moves higher this MA goes up." Obviously true. Equally obvious is that no analysis about future probabilities can be derived by such data.
Perhaps I am out of line for saying such, but it would appear to me that the moment it no longer mattered was exactly when Larry Connors said it mattered.
According to my data, this system has profited in 37 out of the past 49 occurrences since 1992. The average 10 day return on the S&P was + 0.9% However, there were some gaps in the CBOT data, so I can't verify that this is 100% accurate. cheers,
i am not a ten day type of swing trader. but vix does work esp early in the day. I currently use two system type trades based on the vix and a chaikin money flow indicator. Threw the trin, tick and that stuff off the charts. Do monitor the a/d ratio but vix is def the backbone of my internal list. now i have no idea how larry connors trades it but it does work happy trading