There is a "Hidden Support" level that I have published many times here at TradingView and it comes from the large, long term buyers who show up to absorb supply from weak, short-term sellers. The "hidden tracks" that these buyers leave in the market, in this case the SPY (S&P500) revealing their presence is the action of the VIX indicator which retraces 75% of the last 5 point rally.
If you go back and see my other publications on this phenomena, then you can become more familiar with the power of this simple, yet powerful observation.
Cheers.
Tim
Komentarze
NamNguyen5s
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You think spx500 will go up next week?
timwest
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The level marks a KEY SUPPORT LEVEL and will be defended by big money interests. If it doesn't hold, and there are times it hasn't in the past, it can just mean that something much larger and new is being discounted in the market. I do like to figure out what the market is discounting and what it has discounted. From the looks of it, there was more than enough fear at the last low to indicate an important bottom was put in at that time. I don't want to guess every "week's direction" in the spx500. That's just not my style because I don't believe I have an edge in that time frame.
xiiimik
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You should write a book!
timwest
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Thanks @xiiimik - Join us in the Key Hidden Levels Chatroom where we discuss these and other chart setups for low risk, high reward trade setups.
tlcgharvest
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This is a fantastic indicator, I've been following this 75% retracement on VIX to determine support area and it is usually quite accurate. Thanks Tim!
shivavs
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I probably don't fully understand how this works. Early Nov 2015 VIX rose by atleast 5 points, and followed up with a 75% retracement. But what followed after that was a 300 point drop on SPX. (30 point drop on SPY). Did buyers get in then?
peterchung16
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Yes. Because the smart money will always buy at a discounted price. Meaning they are buying at the Red Candles, and Sell it at the Green candles. At this level, it is a good buy, because the E Mini is in a discounted price.
However, you have to keep in mind that the ECB are removing the income by buying the Junk Bonds. The FED is not adding any interest rate injection in the economy. We'll stall at this level for sometime.
timwest
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The 75% becomes an important level where big buyers did step in to load up. It doesn't mean they are correct every time. It is a very useful reference level. If you see my other charts on this, there was a level that wasn't tested initially, but then finally did in a dramatic way with a major drop in the SP500 (SPY).