Inverse VIX / Custom Inverse Line

🎯 Main Idea

This indicator creates a line that moves opposite to the VIX (Volatility Index) — or any symbol you choose.

When VIX rises (fear increases), → this line goes down.

When VIX falls (market calm), → this line goes up.

It helps you visually understand market sentiment — calm periods (bullish) vs fear periods (bearish).

⚙️ Input Settings
Setting Description
Symbol to invert The symbol to invert. Default is CBOE:VIX.
Inverse mode The method used to invert the values. There are 3 options:
① Negate Simply flips the sign (multiplies by -1). Very straightforward.
② Reciprocal Uses the mathematical inverse (1 ÷ value). High values become smaller, and vice versa.
③ Inverse Normalized The most useful mode 🔥 — normalizes values between 0–100 and flips them, similar to an RSI.
Normalization lookback How many bars to use for normalization (default 252 = roughly one trading year).
Smoothing (SMA) Number of bars for smoothing (makes the line smoother).
Use log for reciprocal Uses logarithmic scaling to stabilize big swings.
Plot color / width Customize the line’s color and thickness.
Show original source If enabled, shows the original VIX line for comparison.
📈 How It Works

The script fetches the close price of the VIX (or your chosen symbol).

It applies the selected inversion method.

The inverted line is plotted on the chart.

In “Inverse Normalized” mode:

The range is 0–100.

Values above 75 = high optimism (market often overheated).

Values below 25 = high fear (potential buying opportunity).

A middle line at 50 marks neutral sentiment.

⚠️ Alerts

The indicator includes two default alerts when using “Inverse Normalized” mode:

🔔 Above 75: Market showing strong optimism (potential top or correction zone).

🔔 Below 25: Market showing fear (potential bottom or buy signal).

🧠 How to Use It

Use it on daily or weekly charts for clearer signals.

Compare it with SPX or NASDAQ:

When the Inverse VIX line rises, markets often go up.

When it falls, markets usually drop or consolidate.

Combine it with other indicators (e.g., RSI, MACD) for confirmation.