On the Vindicator the bottoming on the sell line yesterday has proven to have been an excellent short entry. The problem now is when to exit. In the few months the Vindicator has been tracked it has shown that it apparently needs to be used differently in different market conditions. In a strongly trending market such as the bull run we had in February through mid-March, the V Stoch was the thing to watch for trade timing. The Buy/Sell line showed a dominance of the Buy line, as would be expected, and never crossed below the Sell line. However, in all but one instance, a bottoming of the V Stoch below a reading of 25 signaled a successful long entry. Since mid-March we've had a much choppier market, more of a sideways affair with an upward bias. Under those conditions the Buy/Sell line is the one to watch. With one possible exception, going long whenever the Buy line bounced off "trend support" at a reading of 1000 AND/OR going short whenever the Sell line bottomed out close to zero would have resulted in successful trades. That strategy is what led to the short trade yesterday.
Turning to the current situation, you'll notice in the below chart that the Buy line is very near that 1000 trend support level as of today's close. If we are embarking on a strongly trending down market, then the Buy line should be ignored as per the Feb/Mar experience. If not, then reversing from short to long if the Buy line bounces up off that 1000 level would be the thing to do. A lot will depend on the action early tomorrow. The Elliott pattern looks like we might be "extending", which means there is some distance to go before bottoming. In that case, the Buy line might just plunge through that 1000 level and make the whole discussion moot.
The 5 minute V Stoch looks like it might be a useful day trading tool, especially in a strong move like today's. A trader could have banked some serious coin today by going short at the two times where the V Stoch peaked and rolled over.
The 5 minute V Stoch also often lays down diverging patterns which can be useful in timing turns.
