VIX signals and hedging strategy checklist
Stage 1: Compression (Bluff Active)
- VIX: Grinding lower, near recent lows.
- VVIX/VIX: Rising toward 6.9 but not yet breaking out.
- VIX 9D/3M Ratio: Creeping higher from a low base, but not accelerating yet.
- RSP/IWM: Rolling over; breadth weakening, but not collapsing.
🪶 Action: Observe. Do not hedge yet. Bluff is still unfolding. Watch for VVIX acceleration + 9D/3M flattening.
⚡️ Stage 2: Flush Completion (Trigger Window)
- VIX: Attempts a marginal new low or makes a shallow wick—fails to break down cleanly.
- VVIX/VIX: Hits or overshoots 6.9, starts showing sharp upward slope.
- VIX 9D/3M Ratio: Accelerates upward rapidly, front-end vol being bid hard.
- Breadth: Sudden deterioration; Mag7 begins to look heavy or unstable intraday.
🧠 Action: Begin scaling into the blended hedge strategy. This is your inflection zone. Be early, not late.
🔥 Stage 3: Vol Ignition (Feedback Loop Engaged)
- VIX: Spikes decisively, confirming regime change.
- VVIX/VIX: Pulls back slightly after peaking—was early signal.
- VIX 9D/3M Ratio: Possibly inverts (9D > 3M)—panic hedging underway.
- RSP/IWM: Breaking down hard; breadth collapse visible.
🧷 Action: Hedge is now active. Position fully built. Focus shifts to managing theta burn + profiting from convexity.