This Indicator Predicts Market Tops With Incredible Accuracy (Consistent Over Many Years)

#optionsstrategy #optionstrading #daytrading

[cameronjohn]

Thank you, this was very interesting.

I learned just how important the VIX is from SMB and it has really benefitted me as a trader ever since.

For example, newer traders may think a setup is not working or even worse, think they suck at trading. When in fact, that very setup may perform wonderfully with a much higher level of volatility in the markets.

A setup during a VIX of 30 is likely going to perform significantly different from that of a VIX of say 19. I believe in the Playbook, Mike says that many breakouts fail if the VIX is under 20.

Hopefully that helps newer traders in some way. (Especially long biased traders).

I have a question that I hope is reasonably related to indicators.

In an SMB video Garrett mentions using the "tick" as an indicator to measure market sentiment. I'm taking a wild guess here but is that perhaps data showing the total number of upticks and downticks in the market at any given moment? If so I can see why that would be a very valuable market sentiment indicator.

However I am purely guessing.

Additionally, is that proprietary software? Or is that type of information available to independent traders?

Thank you very much.

[soarq]

This won't work in a bull market and will get you rekt. But they don't tell you that in this video, because they want to sell you a course or membership or whatever.

[danielwestereng]

Thank you for the opportunity. I’m working on building my trading account and savings account.
I’m working on discerning which trades I’m aiming for before taking them. Working on overall defining my trade ideas.

I’m working on scalps. Opening drive combined with breakouts. Dip to rips. Full day trades. And hold for a couple days or overnight trades at least. Learning to determine how to spot which of these may be big dog opportunity as well.
I’m building my playbook. Recently transitioned into digital format. But have done a few with paper and printed out charts.
I’ll be working on the goals you set out for me to line up my future spot in SMB! Let’s I’m coming for SMB! I’ll be there I’ll be involved! Thank you SMB for everything! I’m getting better everyday forever!

[betagroobox]

Hello, thank you for this very helpful video. Many people says the VIX is “broken” due to the huge amount of 0dte options. What’s your take on this?

[TargetedIndividual]

Aside from the Vic’s indicator, I have a question. I understand options but are you saying I can sell calls if I buy further out of the money as long as I have the cash to cover the difference? Meaning, I don’t need shares and also not a poor man’s covered call. Just the cash to cover the amount between what I sold and the further out of the money that I buy?

[georgenicholson]

Hi Seth! Do you always hold to Expiry? Or scale out? And what max loss is acceptable as markets and do whatever it wants … VIX has been waffling at lower levels … Curious. Thanks, George

[lexbotkin]

Thank you for sharing! I trade far out of the money credit spreads and use certain metrics to exit. What metrics do your traders rely on to mange their risk on this trade?

[MattTradesLife]

Finally getting a bit more consistency in my options trading. This channels been a MASSIVE help.

[TreydingStocks]

Shorting the market when the VIX closes below 20 would've ONLY worked during the instances mentioned in this video. I don't say this to say it's a bad lesson, but to ensure that it's not as simple as "short S&P when VIX < 20" You need to apply some logic such as overall market trend etc. to your vix strategy.

[GlenFuller-lr]

So are you guys currently in this trade? I notice that the VIX has had closes below 20 since about March 29?

[HamsterHearthstone]

1:1 risk reward, is the win probability >50%? Probably. Good to see a strategy that's not a ticking time bomb for a change. :)

[GabrielNul]

Thanks. Great content and great video. I entered a couple of days ago and moved strongly in favor. Significant move in the last days on SPY.

[KC-drqz]

So you don't actually own the issue of stock your selling calls against? You use margin? Cash covered calls? How do you know the far otm calls will increase enough to cover the risk of the itm calls if the stock price goes up? Delta can change you know

[alsuzy]

Interesting Seth. My favorite strategy I learned from the foundations course was calendars. I play around with credit spreads, but usually with much shorter DTE. Adding the VIX to this changes the strategy entirely.

[johnnyhotwiel]

Great channel! Any thoughts on vix/vvix divergences? Thanks for the alpha

[xinsenpan]

Thanks for another great video on sharing an option strategy!

[realtimeforextraderthebrut]

Thank you for sharing.
Sharing the experience and knowledge of professional traders benefits the trading community as a whole.
Lots of pearls of wisdom from SMB.
Please keep posting more of these informative and very positive videos.
Sharing your analysis of the market, market structure, and the VIX is very generous.
Thank you.

[kennethrobinson]

As the VIX will be going to daily 0DTE options, not just weekly, how does this impact using the VIX as an indicator? How might the daily option expirations impact this strategy? Or more importantly, how might daily VIX option expirations impact the VIX itself, and how long may it take once these are introduced to normalize the volatility in the VIX itself?

[scor]

I remember that year when VIX made an U-turn and broke a ceiling. Fortunately I didn't lose too much. No more VIX trades. Only as a protective entry.

[braddeicide]

The vix being down doesn't seem like much to go off to place such a trade.