Thursday, October 9, 2008

Sentiment Continues to Get Bullish







If one wants to be totally objective and unemotional then this chart of the VIXʼs Devation from itsʼ 50-day moving average shows that we have a screaming BUY signal.  As the red circles above show all major lows in the last 10 years have had VIX deviation from 50-day moving average readings north of 15.00, the PRESENT READING IS 26 !!  All of these lows saw significant market snapback rallies as follows:


 


·          1998 Reading                 Market Up + 27 % (3 Months Later) and + 36 % (6 Months Later)


 


·          2001 Reading                 Market Up + 22 % (3 Months Later) and + 22 % (6 Months Later)


 


·          2002 Reading                 Market Up + 14 % (3 Months Later)  and + 19% (6 Months Later)


 


 


If historical evidence holds correct then this reading should provide a similar solid tradable rally.



sentiment10-09-09.PNG


 


 



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