Refining the Successful $VIX Spike Peak Buy Signals

By Lawrence G. McMillan

Once again, a $VIX “spike peak” buy signal is working out very well. This powerful indicator generated a buy signal as of the close of trading on Monday, August 11th. $SPX has been up six of seven days since then, gaining over 50 points.

In breaking down this most recent signal, we noticed that the 20- day moving average of $SPX was trending downward at the time of the signal. This was not the case on the previous signal (in late July). The previous signal was a loss, and this most recent signal is a strong gain. Is it significant that the market was already trending down when this latest buy signal occurred? That’s what we intend to explore in this article, with a broader look at how we might determine, in advance, how strong the $VIX buy signal is going to be.

The $VIX “Spike Peak Buy” System Let’s briefly review the system, so that anyone reading this article doesn’t have to reference another article to understand what we’re talking about.

1. $VIX is considered to be “spiking” when it has risen at least 3.00 points in a 1-, 2-, or 3-day period, measured using closing prices.

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