VIX, and China:
VIX is coming off its highest spike in a year, and is now back in the 15-30 channel it was in from mid-2007 through mid-2008. Before that, in 2005-2006, the channel was 10-20. There has been a series of lower lows for the VIX, ever since it hit 90 back in 2008, and I expect that trend will continue, till we return to the 10-20 channel. There will continue to be spikes in the VIX, once every month or two, that will be buying opportunities. The VIX hitting lows isn't necessarily a selling opportunity. During bull markets, the VIX can stay low (and stocks keep going up) for extended periods.
China: This is about the only chart that looks like a bear market. The period from the July 2009 highs to today, looks a lot like the period after the October 2007 highs: lower highs and lower lows, plunging below the 200dma, 50dma crossing below the 200dma. China in a bear market, will be confirmed if the 50dma becomes a resistance line, as it was all through 2008. This has implications for all those industries that are depending on China for their growth. If Chinese consumers decrease spending, I doubt Japan or Europe or the U.S. will pick up the slack.
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