Vesselin,
I have learned these painful lessions in this Bad Bear market .You do learn in bear markets.
1. All indicators are secondary.Whether it be put/call ratios,Arms Index,bull/bear ratios or others.(except for the VIX closing at >48.0 then I will always buy for at least for one day.)The VIX > 48.0 I would think would be a very good intermediate term trading signal.Would it not?spike or no spike.
2. The trend is your friend.I use 2 days trending higher or lower a 10 day SMA as a trend definition.Don't trade against the trend.(unless you are in a trading range)
3.Be neither a bull or a bear but a trader and be prepared to go either way.
4. Follow the moving averages and slow stochastics.Daily, weekly, and hourly stochastics and MACD.
This week I bought on monday when the VIX closed at 48.4 and went back to money markets on Tuesday when the daily stochastics turned downward for a 2% gain.
I trade the NDX by uses UOPIX and USPIX.I went out of money market to UOPIX at the end of WED,when the VIX closed at 49.5 at the bottom(short or longterm?)and after friday(when the VIX went to 50.5) have an additional 21% gain in 2 days.I am hoping the Bull is back but if not I am prepared to short when the trend changes.I am thinking we will rally for ~ 2 months. What are your thoughts?
Good Trades
