This indicator gives a potential "buy signal" using of SPX and VIX together,
using the following criteria:
SPX Weekly (10) has been BELOW -9 and now rises ABOVE -5
VIX Weekly (10) has been ABOVE +80 and now falls BELOW +10
The background will turn RED when (SPX) is below -9 and ( VIX ) is above +80.
The background will turn GREEN when (SPX) is above -5 and ( VIX ) is below +10.
So the potential "buy signal" is when you start to get GREEN BARS AFTER RED - usually with
some white/empty bars in between...but wait for the green. This indicates that the
has settled down, and the market is starting to turn up.
This indicator gives excellent entry points, but be careful of the occasional false signals.
See Nov. 2001 and Nov. 2008, in both cases the market dropped another 25-30% before the final
bottom was formed. Always have an exit strategy, especially when buying in after a downtrend.
How I use this indicator, pretty much as shown in the preview. Weekly SPX as the main chart with
some medium/long moving averages to identify the trend, VIX added as a "Compare Symbol" in red,
and then the Weekly signals below.
For the graphs, you can show SPX+VIX together, SPX alone, or VIX alone. I prefer to display
them separately because they don't scale well together ( VIX crowds out the SPX when it spikes).
Background color is still based on both SPX / VIX together, regardless of which graph is shown.
Note that there is no VIX data available on Trading View prior to 1990, so for those dates the
formula is using only (SPX) and the assigned thresholds (-9 and -5, or whatever you choose).