VIX signal works magic

The VIX buy signal worked so well, there was really no time to trade it. The market got so bullish so fast, moving 20 points in the first 3 minutes of trade, that I would have had to make the trade yesterday for a reasonable fill. In hindsight, that was the obvious trade to make!

After the initial thrust the market created a trading range between the low of last Wednesday (around 2040) and the close of last Thursday around 2055, from which the markets gapped lower last Friday. This 2040 area on the SPX is interesting as it remains a pivot between bullish and bearish sentiment.



With tomorrow's FOMC meeting on the deck, put buying continued in an excessive manner. The SKEW traded up again, holding above 140 for the 3rd consecutive day. High SKEW readings can signal a coming pullback in the SPX, but usually when the market is already in a strong uptrend. A two day bounce does not qualify. I would expect the SKEW to give us a more normal reading after the FOMC.