Dawg,
I disagree with your interpretation of what we are saying.
A low vix reading is usually associated with a topping in the market. It is true that a sell signal on the vix is generally associated with a buy on stocks, but it matters at what levels the signals happen. Same thing with the Bullish percentages. Getting a buy signal near historic highs is less bullish than if it is from low levels. And then if you look at different perspectives of the comp chart, we still haven't broken out of a bear market rally level yet. At this point, I am leaning toward the idea that we are going to have another blow off top type rally that wipes out all of the bears and then we crash again. I think that the blow off top rally will start from levels that are a little bit lower than current levels.
Anyway, I am not giving contrived readings of charts. It is always prudent to be thinking about the top when there is a low VIX reading, a high bullish percent reading, extreme high readings on the tick and extreme low readings on the trin.
As I said in an earlier post, if we get to 2010, I go bullish. That is because we will have broken through a resistance level that I am watching. But really, we won't have broken out of the long term downtrend until we break through 2100.
and something else to think about. Greenie doesn't have too many more bullets in the interest rate gun. What happens when he stops cutting rates? What happens when he stops pumping money into the system? That is all that is holding up this market. And I think that the minute that the fed stops cutting rates and stops with the liquidity, things will fall apart. And I think that the is more likely to do this after a sustained rally (like we have had since September) than waiting for a pullback. |
