Adam over at Adam's Options has one more interesting article on the VIX to share with you. It is worth your time to read it.
But I wanted to show you something else about the VIX - something that every day trader should know - you can read the VIX as if it were a stock -
As you know but by way of refresher when the VIX goes up the market goes down and vice versa. As you can see in the figure above - the head and shoulders formation suggests that the VIX is going down. If you remember last Friday the later half of the day saw a large recovery and many stocks finished the day up. Yesterday the blow off bottom in the VIX signalled an abrupt reversal of the market which did occur beginning at 1 P.M. EST. (Note there is no volume in the VIX - the blow-off bottom has to be intuited by the large descending candle followed by an ascending candle). You can also keep a chart of the VIX on your monitor with the Bollinger Bands as is suggested in Adam's article. That looks like this on the 15 minute charts from yesterday. Once again a clear signal that the market would be changing direction.
So you see - keeping an eye on the VIX can inform the direction of your trading regardless of your time frame.
And yes I'm supposed to be going on vacation - I'm going, I'm going.