The combination of computing power and curiosity — “I wonder what happens if I divide this number by that number, or add that number to this number?” — continues to drive analysts to develop new tools for understanding markets. Sometimes this leads you down blind alleys, other times it can pay dividends.

The indicator detailed here, the VIXRSI, combines two tools — one old and one relatively new — to identify buying opportunities. The two indicators are Welles Wilder’s Relative Strength Index and Larry Williams’ “VIX Fix,” which itself is the product of a search for a VIX substitute that could be applied to any market.

Before attempting to put these two indicators together, let’s first review each of them separately to better understand what they’re bringing to the table.