Forum Topics VIX Futures as a Market Timing Indicator
Rapstar
Added one year ago

S & P 500 VIX futures is now in backwardation on 3 month forward basis - BUY SIGNAL. VIX 3 month slope: -0.001

We need to see get to -0.007 (for top 20%) or, even better, -0.0178 (Top 5%) of VIX inversions.....

Inversion indicates time to start buying the dip....


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Arizona
Added one year ago

@Rapstar I like a bit of macro discussion.

It can get intensely company specific around here.

Cheers

5
Rapstar
Added one year ago

S & P 500 VIX futures is now in backwardation on 3 month forward basis - BUY SIGNAL. VIX 3 month slope: -0.031

Noting that as the slope is less than -0.0178, it is Top 5% of VIX inversions.....

BUY THE DIP SIGNAL.

S & P 500 is always UP over the forward 3 months.....

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raymon68
Added 2 years ago

Bears are out and about.........

Premarket Stock Trading Data: Dow, S&P, NASDAQ Futures (cnbc.com)

Wednesday PreMarkets Have the Jitters:


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USA VIX up +13.46% Bonds too strong

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Rapstar
Added 2 years ago

VIX future backwardation is not quite there yet wrt BUY SIGNAL. Hold your horses.

VIX 3-month slope is still positive @ 0.005 - We need to see get to -0.007 (for top 20%) or, even better, -0.0178 (Top 5%) of VIX inversions.....

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Solvetheriddle
Added 2 years ago

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Rapstar
Added 2 years ago

VIX Futures are getting close to backwardation, an important buy signal for the S & P 500. Reminder: When the VIX 3 month futures go into backwardation, it signals the S & P 500 will be higher in 3 months time. This signal occurs on average, once or twice a year. Notably, there is also a crowded short position (-7%) in VIX Futures. When this occurs, the VIX is up on average 9.6% in one months time, with a 67% percent positive ratio.

This is a good setup for the VIX Futures to flip into backwardation.

I am posting this now, as I missed the last signal back on March 13 (S & P 500 subsequently rallied 15%).

FYI, I also missed the September 24 2022 signal.





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Rapstar
Added 2 years ago

VIX 3 month futures now backwardated ......slightly.

S & P 500 may lose a few more points into OPEX.

Buy the dip...


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thunderhead
Added 2 years ago

The index is also getting close to some levels of support, including the 200DMA. This could be the bottom, or we could have a few more weeks of seasonal weakness culminating aroun d these levels, give or take a few %. Watch the price action here closely.

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Valueinvestor0909
Added 2 years ago

@Rapstar Thanks. How do we check this? just googled what backwardation means -- now trying to see how can I monitor this? do you have any link for this or some sort of explanation to watch for complete novices?

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Rapstar
Added 3 years ago

Shorted S & P 500 (BBUS) - VRatio (VIX3M/VIX) @ 1.15, VIX = 18.

Will close short when VRatio <1>

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Rapstar
Added 3 years ago

VRatio (VIX3M/VIX) @ 1.21, VIX = 16.8.

Previous two times VIX futures (S & P 500) contango was this steep was December 2, 2022 (preceded 7% S & P 500 decline); and August 16, 2022 (preceded 17% S & P 500 decline).

Previous short 3 months ago @ VRATIO of 1.16 remains in the red. I was too impatient and did not wait for VRatio >1.2..............

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