Extremely oversold conditions, VIX spike buy signal

With so many oversold conditions in the market arising since 2016 started, I wait for signals to show that the market might turn bullish. So far, most signals have not materialized, but the fruit is ripening.

The VIX has closed more than 3 points of its intraday high of Friday, so I entered a very bullish trade with defined risk. I bought the Jan 22 SPX 2000/2005 call spread for 65 cents. If the market gets bullish, it could move quickly, so I want to be a bit ahead of the curve with a bullish call spread.

Besides the VIX signal, the VXST also traded below the long-term volaitility measures. This is a new signal that reinforces the bullishness of the VIX signal.

With the SKEW at 138, and still in this wildly elevated state since September, its hard to see a very long term change in the markets bearishness yet. We need the Skew to come down and the Put/Call ratios to roll over to buy signals before the market attempts a real bullish run. Those signals are still being set up.