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The markets have been drifting sideways — likely ahead of the Fed meeting that starts on December 9th and wraps up on December 10th. We may see movement before then, but quiet periods like this are the perfect time to study other securities that can help you anticipate where the S&P, Nasdaq, Dow, or Russell might go next.
And for me, that security is the VIX.
The VIX is the CBOE Volatility Index — often called the “fear gauge.” When the VIX rises, fear is rising. And when fear rises, benchmark indexes usually fall. I like to think of it as the Upside Down from Stranger Things: it looks like our world… but everything is inverse.
Today, I’ll walk you through how I analyze the VIX using price action, market timing, and momentum, and how you can apply the same approach to better understand the broad market — even if you never trade VIX options or VIX futures directly.
A Quick Look Back
When you pull up a daily chart of the VIX (in TradeStation: $VIX.X), zoom out to a full year. This gives you a feel for the rhythm of this instrument. There was a major VIX spike in August 2024 during the yen carry trade disruption. Later, another dramatic spike on the week in April 2025 where major tariffs were announced.
Each time the VIX surged, it eventually fell — and as it fell, broad stock indexes climbed. This inverse relationship is the baseline context you always want in mind.
The Trendline That’s Still in Play
Several months ago, I noted a clean trendline on the VIX:
- Start at the August 28th low
- Connect it to the September 12th low
This is how trendlines should be drawn — from one key turning point to the next, not guessing into the future.
That line was validated again on September 18th, approached on September 26th, held through the dramatic move in mid-October, and remained intact on October 27th.
And here we are again — testing it.
Once a trendline has been pierced even intraday, I like to convert it to a dashed line. It becomes a weaker “floor.” And with the VIX, I use air quotes here — because a “floor” on the VIX is more like a ceiling for the S&P.
Right now, that trendline support is still holding.
And that may not be the most comforting sign for stock traders.
Reading the VIX in Reverse
If you use a momentum indicator like my RSI Power Zones, you need to flip the interpretation when you’re analyzing the VIX.
- Bull Support Power Zone on the VIX
→ comparable to the Bear Resistance Power Zone on the S&P 500 - Green candlesticks on the VIX
→ often mean downward pressure on the broad market
This perspective comes from an exercise my dad used to have me do as a kid: when a chart confused me, he’d print it out, flip it upside down, cut off the axes, and hand it back. Suddenly the patterns and trends were more obvious.
The VIX allows you to do that same exercise—without scissors.
Match the VIX Timeframes to Your Own
Whatever timeframes you use for your main market — match them on the VIX.
My workflow for E-mini S&P 500 futures analysis and trading is Weekly → Daily → 60-minute → 3-minute → 15-second
Yours might be completely different. What matters is consistency.
On today’s 60-minute VIX chart, I’m seeing a Bull Bear RSI Face Off starting near the Bull Support Power Zone. That’s not great for stocks. And price has already moved above its first “resistance” at 16.35, with the next key “resistance” at 17.28.
If VIX pushes through 17.28, that opens the door for more weakness in the ES.
Cross-Checking With the ES
On the 60-minute ES chart, we saw a morning test of resistance followed by a pullback. It doesn’t mirror the VIX perfectly — it never does — but the relationship is clear enough to use as confirmation.
If you trade midday, late day, evening, or you focus on index futures or broad-market ETFs, the VIX can be a powerful addition to your workflow.
It’s not a perfect inverse instrument. But it is a consistently helpful guideline — especially during quieter stretches like the one we’re in now.
If this walkthrough helped you understand the VIX or gave you ideas for using it in your own market prep, hit that like button.
~Hima
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