Wednesday, February 27, 2013

The VIX, Will It Rise Again?

The VIX works like a terminator. When the VIX is down it will terminate the markets advance, and when it is up it will terminate the markets decline.  We had a sharp drop in the VIX but it left a small gap in its wake. This gap will get filled but we will see how much power the VIX can sustain. If the VIX has power, it could explode one more time and hopefully break the top channel line. For another sustained bullish advance to happen in stocks, we need a lot more height in the VIX than what it has giving us so far.