One of the setups I posted on frequently is the VIXEN, which uses an overlay of the VIX and the focus stock or ETF to identify sweet spot trades. This version uses TLT as an overlay on XLF to quickly see the super high odds trades. The beauty of this setup is that is can be used fractally, that is, on 5 minute, hourly or daily bars. A simple Tradestation formula on daily bars Long or Short with a 12 day fixed exit shows 100% reliability. For shorter term intraday trades a close eye is required as the crossovers “float” over time on most platforms. The daily setup is currently OUT.
We also know from previous posts that the TLT/XLF trade performs very well using the Market Rewind Pairs Trader and we’ll compare results of that tool with the VIXEN in a subsequent post.