This week the VIX index went into the Complacency area, that means that Bulls are now all to confident, that the rise will just keep going - It won't!, but it doesn't mean that we can't stay in this area for a longer term, just take a look at 2005 and 2006.
Looking at the Bollinger Bands the VIX closed above the lower band yesterday after two days with a close below the lower Bollinger band. A close below the lower Bollinger band is bearish for stocks and it's just a question of time before the market turns. After a close outside the Bollinger band the VIX will at least head for the mid band, but more likely head for the opposite band, which in this case would be the upper band.
Finally the Elliott wave count confirms that a important bottom could be in place and a new powerfull rally ready to begin at any time now. As can be seen wave [A] and [B] is now in place and wave [C] ready to begin. In the bigger picture this is a flat correction, which would call for wave [C] to break above the ending point of wave [A].
This week the VIX index went into the Complacency area, that means that Bulls are now all to confident, that the rise will just keep going - It won't!, but it doesn't mean that we can't stay in this area for a longer term, just take a look at 2005 and 2006.
Looking at the Bollinger Bands the VIX closed above the lower band yesterday after two days with a close below the lower Bollinger band. A close below the lower Bollinger band is bearish for stocks and it's just a question of time before the market turns. After a close outside the Bollinger band the VIX will at least head for the mid band, but more likely head for the opposite band, which in this case would be the upper band.
Finally the Elliott wave count confirms that a important bottom could be in place and a new powerfull rally ready to begin at any time now. As can be seen wave [A] and [B] is now in place and wave [C] ready to begin. In the bigger picture this is a flat correction, which would call for wave [C] to break above the ending point of wave [A].
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