SPX/VIX RATIO

SPX VIX Debate
http://www.sonic.net/~weasel/vix_vxn.html (from my posting on a message baord)

I am the one who seems to bring this up the most, so let me have another stab at it.AS above link will show and point out (at the time.....now we do have highest ever readings)....this ratio IS significant.However, like the CPC, it is not just the rise in this ratio to new heights that is important.....it will be when it begins a decisive DECENT!

Point is, pointing out attitudes and extremes is only half of equation, it is when they CHANGE we really want to know.SO, IMHO this ratio is VERY pertinent, however the guy who bet the farm on it was mistaken on its importance.
Investing long when in this now unknown zone but above previous no win zones is just a warning signal, heed it or not, it is not a TIMING MECH by itself! I never said it was.I would please like to point out the period of about ONE YEAR that was spent ABOVE "crash" readings higher than 68 or so is now about the same, only readings are at HIGHER than 1999-2000 levels.But until it descends in earnest.....giving clue indeed attitudes have changed, risk is feared....the high reading itself will not be a problem.

As a LOW CPC is NOT a problem, until it TURNS UP in earnest.That is ANOTHER misidentified indicator....as is VIX....what does it matter if VIX is low? until it TURNS UP IN EARNEST

3 GOOD indicators together when they turn up in earnest a more clear signal of what investors are thinking.UNLIKE when coming DOWN ( a SPIKE of fear seems to last briefly, is why a VIX 50 had been a great BUY signal!)....this FEAR subsiding can no longer FEED the market......now we have greed....and LACK of fear existing and the WANT to take risks.

Pointing to the SPX for now will only tell you to be watching it when it CHANGES!In that sense.....never discount its meaning or validity....only how to interpret it.

Duratek