COULD THE VIX BE GOING INTO FLOATING DEAD RODENT MODE?
A few more charts here. We have the new high-new low ratio, which is a contrary indicator. When it's moving to the top of its range it acts as a more reliable version of an overbought indicator. Same with the other chart, which is the % of stocks above 200 day moving average. It's another version of an overbought indicator that points to the market overheating when it gets to historically high levels. I have found these indicators to work better than stochastics or RSI...or any of the millions of other indicators that make technicians salivate as they perform the visual optimization dance.
I think the most interesting and telling chart of all, however, is the chart of everyone's favorite cousin the VIX. I explain this in the chart...but very briefly, just imagine a dead rodent floating down a very calm river...that may sum up the trading pattern in the VIX over the next few years.
New high/new low ratio
% stocks above 200 day moving average
VIX
