Ripster's $SPY $VIX #STRATEGY to trade $SPY $QQQ and Large Caps Long and Short
I have been Trading $SPY $VIX Strategy since 2019 but It really gained momentum in 2020 in high VIX environment. I popularized the trend of using $VIX to make your trades on $SPY $QQQ and other Large Caps that make up the Indices. $VIX was often avoided by many experienced traders as tool for to define Technical Setup because many believed it does not respect any technical trading rules. I proved them all wrong by showing Trades based upon how VIX reacts to certain Support Resistance Levels and Corresponding inverse move on $SPY and $QQQ(although $QQQ has $VXN for volatility but since most major constituents of the Index remained same we could use that). There were some cases of Divergence ($SPY $VIX going to same direction) which I also explain in few of Examples below.
Lets first look at what folks have been saying about this strategy since I have been teaching this for over the years, thousand of traders have found success with this but I just want to show some selected commentary how it has helped many
Now , That we know the strategy can definately work if given enough screen time and dedication, lets look at how this works
I always have $SPY $VIX $QQQ on my screens always and I draw all support resistance levels on $VIX Daily/Weekly/Hourly and I keep eye on them or have the price alerts set. Strategy is most useful in high elevated VIX environments mostly over 18.
When $VIX goes under 18 or in "calm territory" specially under 16 to multi year lows, its impact on my $SPY $VIX strategy minimizes or goes away entirely;then in that case we really on pure trend/levels. $VIX pivot strategy works best in elevated $VIX environments #tradingtips
$SPY $VIX $QQQ #tradingtips So this strategy is simple, chart key levels on $VIX and key levels on $SPY $QQQ, keep all open same time.As VIX breaks key levels, it ideally continues in same trend and inverse will be on $SPY large caps. So trade accordingly.
There are some historical levels like 18, 20,22, 25, 28,30, 32 to name few which always act as big levels, from swing perspective VIX from 16/18->32/36/40 gave pivots for swings always as well if you see the weekly charts I have been posting
If you want to learn what VIX exactly is you can google and find lot of information out there.You do not have to understand the complicated formula for VIX for this strategy but you have to atleast know how it affects the Market. Over 18/20 is usually Fear in the market and bearish moves (more volatile) Even Option price are higher in high volatility. In low VIX environments SPY range is lower and moves calmer.
#tradingtips When Fear Rises: Volatility Rises, $VIX Spikes, Spreads Widen, Stock Range ATR increases, Option Prices Rise. Things can go lower beyond our intellectual predictions or sane analysis. I guess we all saw that March 20 Learn to manage risk in such environments
Many argued that VIX does not respect tehcnicals but I have shown 100s of times on live before after trades how exactly VIX technical help us either trading VIX or trading SPY QQQ or main mega caps long or short be it a swing trade or mostly Day Trade.
Sometimes $SPY and $VIX will move in same direction showing Divergence , When this happens one side eventually make explosive reversal. I will show in examples below
Below are Some Trade Recaps which will give you enough idea. All these trades were live on Twitter feed and called out before the move and sometimes giving us big winners. If you want to further learn more about this, feel free to contact me directly or if you want a live session to go through them.
First Couple of Recaps are from Divergence - When SPY VIX Move same side together. I am often asked about them, just couple of examples but we have nailed divergence trades many times
