Forum Topics VIX Futures as a Market Timing Indicator
Rapstar
Added 4 months 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 4 months ago

@Rapstar I like a bit of macro discussion.

It can get intensely company specific around here.

Cheers

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Rapstar
Added 4 months 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 one year 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 one year 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 one year ago

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RhinoInvestor
Added one year ago

My analysis is no where near as technical as @Rapstar

The simple mantra is … When the “VIX is high, its time to buy”

Not even close to high levels of volatility just yet (my rule of thumb is 30). I’m just hoping the South Pacific Peso still has some value if we get to that point. My whole US portfolio is only looking OK when I look at it in AUD.

https://www.investopedia.com/articles/optioninvestor/09/implied-volatility-contrary-indicator.asp#:~:text=%22If%20the%20VIX%20is%20high,move%20back%20toward%20the%20mean.

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Rapstar
Added one year 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 one year 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 one year 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 one year 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 2 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 2 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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