The VIX index closed at the lowest level since July 22 - 2007 yesterday. The equity market again feels very complacency, when the equity market enters this area the risk of at least a bigger correction becomes imminent.
When the VIX index closes below the lower Bollinger Band some kind of top becomes even more imminent. The chart below shows the times when the VIX index breaks above or below the Bollinger Bands. As can be seen a close above the upper Bollinger band is bullish for stocks, while a close below the lower Bollinger band is bearish for stocks.
The Chart below is just a close-up of the chart above.
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