(Source: Wikipedia) VIX is the ticker symbol and the popular name for the Chicago Board Options Exchange's CBOE Volatility Index, a popular measure of the stock market's expectation of volatility based on S&P 500 index options. It is calculated and disseminated on a real-time basis by the CBOE, and is often referred to as the fear index or fear gauge.
I consider that a VIX above 30% is a very bearish signal.
Above 30% translating investors selling in masse their assets. #blood #on #the #street
(Source: Wikipedia) The U.S. Dollar Index (USDX, DXY, DX, or, informally, the "Dixie") is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies, often referred to as a basket of U.S. trade partners' currencies. The Index goes up when the U.S. dollar gains "strength" (value) when compared to other currencies.
The index is designed, maintained, and published by ICE (Intercontinental Exchange, Inc.), with the name "U.S. Dollar Index" a registered trademark.
It is a weighted geometric mean of the dollar's value relative to following select currencies:
Euro (EUR), 57.6% weight
Japanese yen (JPY) 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight
Swiss franc (CHF) 3.6% weight
In "bear markets", the DXY usually goes up. People are selling their hard assets to get some USD in return - pumping the DXY higher
Corollary
I'm not sure which one happens first between a bearish DXY or bearish DXY... though both are usually correlated
If:
- VIX goes above 30%, usually DXY increases and assets versus the good old' USD drop - VIX goes below 30%, usually DXY decreases and assets versus the good old' USD increases
This is a nice lever effect between both the VIX, DXY and the assets versus the USD
That's being said, I don't only use those 2 information to enter in a trade. It gives me though a strong confirmation whenever I'm long or short
Imagine I get a LONG signal but the combo VIX + DXY is bearish... this tells me to be cautious and to:
- enter at a pullback - protect my position quickly at breakeven - take my profit quick
For a mega bull market (some called it hyperinflation), you want your fiat to drop in value for the counter-asset to increase in value. And before you ask.... yes I look at what DXY is doing before taking a trade on BTCUSD :) In other words, DXY going down is quite bullish for Bitcoin.
Settings and Alerts
The settings by default are the ones I use for my trading.
The background colors will be colored whenever the COMBO is bullish (green) or bearish (red)
Alerts are enabled using the brand new alert function published last week by @TradingView
under Correllary you have this:" I'm not sure which one happens first between a bearish DXY or bearish DXY ... though both are usually correlated" Did you mean "...which one happens first bt a bearish DXY or bearish VIX....or bearish DXY or bullish DXY or perhaps another variation of these? Lastly, thanks for all your efforts brother. Its not uncommon for your scripts to become a strong influence when it comes down to MY best/most favorited (by me) scripts....not only is there great substance in your work but you do good job of creating a little eye candy for us simple minded/easily distracted baby birds....and thats enough to give anyone a "hard asset"...if you know what I mean ;)
Daveatt
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@chasinalts, I'm glad and very worried for you that my posts are giving you a "hard asset" sir :)
The indicator appears as loaded but there is no information on the screen as it appears on the indicator page, could you look into it. thanks for sharing
It's so nice and clear to review the DXY and VIX in the simple way; great stuff, keep it up sir <3