HO · Energy / Macro Overlay
Z85527 – [HO] HO VIX Overlay Signal
Low VIX reflects risk-on macro environment with commodity-complex demand supported by growth expectations and loose financial conditions transmitting bullish Heating Oil; elevated VIX reflects risk-off stress with commodity complex.
At a glance
Current reading
-0.995
Signal state
Moderate NEG
2 days in Stress phase
Phase
-2.50
Positive equals vol low (risk-on) regime; negative equals vol high (risk-off) regime.
Sample
Multi-year window
Daily cadence
As of Nov 06, 2026. Updated nightly.
SIGNAL OVERVIEW
Low VIX reflects risk-on macro environment with commodity-complex demand supported by growth expectations and loose financial conditions transmitting bullish Heating Oil; elevated VIX reflects risk-off stress with commodity complex pressured by demand concerns transmitting bearish HO. The signal takes CBOE VIX close z-scored against 252-day window, sign-flipped so low vol maps to positive composite, tanh-bounded. The empirical phase pattern (see regime table) shows Phase +1 (Vol low (risk-on)) delivers +1.14 pp edge on 54 percent sample; Phase -1 (Vol high (risk-off)) delivers -1.56 pp on 34 percent sample. 2.70 pp spread via the VIX macro-vol overlay channel.
LIVE CHART
HO HO VIX Overlay Signal
What the chart is showing right now. The dark line is the HO VIX Overlay composite value, tanh-bounded. The bronze line in the middle panel is NYMEX Heating Oil front-month continuous close. The bottom panel tracks the trailing 252-day Spearman information coefficient. Positive composite reflects vol low (risk-on) regime; negative composite reflects vol high (risk-off) regime.
COMPOSITE
-0.995 / tanh
STATE
Moderate NEG
PHASE
-2.50
PHASE +1 EDGE
+1.14 pp
PHASE -1 EDGE
-1.56 pp
TODAY’S PLAYBOOK READING
STATE
Moderate Neg
STATE AND HISTORY
HO VIX Overlay signal firing at composite -0.995, 2 trading days running in current phase. Phase +1 delivers plus 4.18 percent Heating Oil fwd60d; Phase -1 delivers plus 1.48 percent.
THE MECHANISM
The signal takes CBOE VIX close z-scored against 252-day window, sign-flipped so low vol maps to positive composite, tanh-bounded.
HOW TO POSITION
HO VIX Overlay overlay for Heating Oil. Phase +1 firings reflect vol low (risk-on) regime. Phase -1 firings reflect vol high (risk-off) regime. Pair with related HO signals for stacked conviction.
WHAT THE CHART SHOWS
The composite sits at -0.995 in the current band. HO VIX Overlay signal reading in current regime through late 2026.
TOP INPUTS FIRING
- Primary composite -0.995 State Moderate NEG, 2 days running in current phase.
- 2.70 pp spread, VIX macro-vol overlay channel Phase +1 edge +1.14 pp on 54 percent sample; Phase -1 edge -1.56 pp on 34 percent sample via VIX macro-vol overlay channel.
THE TAKEAWAY
What this means for you today
THE CALL
Composite -0.995, current state Moderate NEG. HO VIX Overlay signal reading in current band through late 2026. Phase Stress firing for 2 trading days.
THE EMPIRICAL CONTEXT
Phase +1 edge +1.14 pp on 54 percent sample. Phase 0 edge -0.81 pp on 12 percent sample. Phase -1 edge -1.56 pp on 34 percent sample. 2.70 pp spread.
THE HONEST CAVEAT
Macro-vol signal can decouple from commodity-specific supply shocks. Signal reflects broad risk regime not distillate-specific. Russia-invasion 2022 was channel-divergent episode. Daily IC not individually significant on all sampling windows.
THE REGIME MAP
The three phases, Heating Oil forward returns and sample share
Regime table captures phase-conditional edges on Heating Oil forward 60-day returns from live-window trading days. Phase +1 minus Phase -1 spread via the VIX macro-vol overlay channel.
| State | Phase | Share | Fwd 60d | HAC t | Edge vs baseline | Last firings |
|---|---|---|---|---|---|---|
| Vol low (risk-on) | +1 | 54.4% (5004 d) | +4.18% | +1.14pp | Oct 2026, Oct 2026, Sep 2026 | |
| Normal | 0 | 12.1% (1110 d) | +2.22% | -0.81pp | Nov 2026, Oct 2026, Oct 2026 | |
| Vol high (risk-off) TODAY | -1 | 33.5% (3077 d) | +1.48% | -1.56pp | Nov 2026, Nov 2026, Oct 2026 |
The historical pattern
Signature episodes
What this measures
Low VIX reflects risk-on macro environment with commodity-complex demand supported by growth expectations and loose financial conditions transmitting bullish Heating Oil; elevated VIX reflects risk-off stress with commodity complex pressured by demand concerns transmitting bearish HO. The signal takes CBOE VIX close z-scored against 252-day window, sign-flipped so low vol maps to positive composite, tanh-bounded. Target NYMEX Heating Oil front-month continuous.
Why it matters
Why HO VIX Overlay matters for Heating Oil
Low VIX reflects risk-on macro environment with commodity-complex demand supported by growth expectations and loose financial conditions transmitting bullish Heating Oil; elevated VIX reflects risk-off stress with commodity complex pressured by demand concerns transmitting bearish HO. The signal takes CBOE VIX close z-scored against 252-day window, sign-flipped so low vol maps to positive composite, tanh-bounded. Transmission is via the VIX macro-vol overlay channel.
How to use this signal today
HO VIX Overlay overlay for Heating Oil. Phase +1 firings reflect vol low (risk-on) regime; Phase -1 firings reflect vol high (risk-off). Pair with companion HO signals listed in Related.
Risk overlay
Three limitations. Macro-vol signal can decouple from commodity-specific supply shocks. Signal reflects broad risk regime not distillate-specific. Russia-invasion 2022 was channel-divergent episode. Daily IC not individually significant on all sampling windows.
Signal consumers and siblings
Not investment advice · The analysis on this page is informational and educational. Signal readings, historical case figures, and empirical statistics are derived from publicly available data and are provided without warranty. Hypothetical performance results have inherent limitations, including the benefit of hindsight. Readers who intend to trade should consult a licensed investment professional and see the research brief for the full disclaimer.
Last refreshed Nov 08, 2026 08:15 PM ET