Saturday, December 20, 2008


Just as an EKG illustrates the indisputable artifact of a heart attack, the VIX displays the same for a market in severe distress. If we look back at the October 2002 lows and compared the print of the VIX then to the VIX now, we see remarkably similar emotions in the charts. See for yourself. I took the liberty of indicating where the November 13th and Nov 27th lows on the S&P would be on the 2002 VIX chart. As you can see, the final capitulation low on the S&P prints a lower VIX then the double tops.

To me it looks like the groundhog has seen his shadow and we may be in for six more weeks of winter.

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