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First, I have to warn you that the VIX is one of the most misunderstood indicators out there, thanks to its popularity and media coverage that seek sound bites more than sound advice. The chart below doesn't give you the full scope either of how the VIX works but it is a basic and correct interpretation at this junction and time-frame. Read more below.
According to this chart, the fear index can tell us one thing clearly:
"We still not yet in a secular bull market if not in a bear market"
That said, the market is definitely eager (I am not sure if willing) to go there and fall into complacency at any cost! You know, everyone loves a bull except me and Lucifer.
Analyzing the chart above, falling into the
green zone (not the one in Baghdad) will signal that the VIX is falling into bullish complacency
levels, which is ironically positive for the market and could give the green light to start a new bull market somehow.
Hey fellow bears, take heart. Didn't mean to
scare you. These levels also could usher the resumption of the bear
market again, the one most of you start to lose conviction in. O you of little faith! As of yesterday, you are only 15.9%! That is 1.6 out of ten. Me Culpa or should I celebrate?
I know! Here things are getting dicey! I feel for you and I ain't blaming you. Low VIX could signal either the start of a bull market or the resumption of a bear market? That doesn't help, kiddo! Right? This is where I have to bring my writing mind that have IQ resistance of 80 coupled with poor vocabularies and sentence structure to put that one article about the VIX that I promise will knock your socks off. :)
Until then, I would believe that it will take a huge participation with new money than this anemic volume to bring utter conviction into the bulls' hearts and terror into our bears' young but fainted hearts and push the VIX lower and hold it down there while equities shoot for the stars.
You gotta be kidding me, superman! How are you gonna do that?
Only time will tell.
One more time, this is simplification that doesn't give the VIX its fair share though it is an accurate analysis. For more super charts including the VIX historical chart, check out the latest patch in "The LinkUs Hub" and come bring yours to our round table.
Current SPX 500 @ 1148.46 and DOW @ 10710.55
Be happy, do good, and the rest will be taken care of.
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