Crises evolve over 1 month as from Sep 18 to Oct 16 this year. In 2011 when QE was turned off in June, the crisis started the following month in mid-July and the crisis peak was also 1 month (mid-Aug). The best returns are during crises.

Given that Feb 2015 would be the crisis month, a 1 month back-off would entail the crisis starting mid-Jan.  So the first time to watch for VIX GHA will be on/after PMI day, Jan 1 2015.

When VIX HA turns green and TLT GHA/SPY RHA is observed, buy TLT at the open.  SPY should also be RHA (red Heikin-Ashi daily) at that point. When QE is ending, TLT and SPY are inverse to each other at transition points. TLT should only be bought when QE is ending or ccpi is 2.0. When QE is turned on, inflation could become a problem and therfore TLT is not recommended. VIX is the primary indicator for storms/crises and transitions.

Remember that Heikin-Ashi represents the average-pace of prices. The resulting candlestick filters out some noise in an effort to better capture the trend. In Japanese, Heikin means “average” and “ashi” means “pace” (EUDict.com). I have also added the 12dma to my charts to filter out additional noise. I am using HA (heikin-ashi daily) with VIX, TLT, and SPY to identify the dominant trend.  All 3 need to agree:

Uptrend SPY – VIX RHA, TLT RHA, SPY GHA

Uptrend TLT – VIX GHA, TLT GHA, SPY RHA  (QE ending or ccpi 2.0)

If not, it’s noisy and not worth pursuing. Stay cash in this case.

If a turn occurs after a trend starts (GHA turning to RHA at the open), watch for -0.5% or more of a move before selling. A ‘thin’ RHA at the open can be ignored. In general, a RHA at the open (on an uptrend) means sell.