Thanks for bringing this up. $SPX/$VIX was better than a 5-bagger since 2002... very interesting. The ratio has been trending up through thick and thin during those last few years, but still -- note the lows in August 2004, and in April - May of this year, as well last October. They coincide with lows in the markets.
Otoh, note the peaks last December and last summer. They are pointed pretty nicely to tops.
$VIX is related to emotions, and human emotions in the final analysis do not trend -- they oscillate. I think there always will be a way to use it as an indicator.
I made it a weekly:
stockcharts.com[f,a]walayyay[d20020101,20051224][pd20,2!f][vc60][ila12,26,9!lp14,3,3]&listNum=1 |
