VIX, VALUABLE OR VALUELESS?

http://news.goldseek.com/TacticalInvestor/1108738805.php

My own opinion is it IS valuable. Rather than predicting a LOW VIX will lead to a decline like many did as it fell into 2003, you MUST wait until it breaks above its longer term moving averages, then you can feel more confident that RISK is less tollerated.

ALL a low vic tells us now is that Options Writers have little fear of losing when selling CHEAP PUTS! And they have been right! SO we must wait for a strong trend reversal in the longer term MA'S of the VIX.

It isn't that it doesn't work, it is all in how you interpret it. MANY went short at 20 VIX because it was at 50, a FALLING VIX was a sign of falling FEAR, just the opposite of what the hasty shorts felt!

BUT, the SPX VIX ratio I show from time to time, is a better tool, IMHO

http://stockcharts.com/def/servlet/SC.web?c=$SPX:$VIX,uu[w,a]wallyiay[pb30!b60!f][vc60][iut!Ub14!Lh14,3]&pref=G

We can compare the VIX to the price of the SPX. And we can compare it to the ast 10 years. We have a new high and a current double top in it.

With prices STILL below 2000, BUT this RATIO at ALL TIME HIGHS, ti is not signalling a top, it is WARNING OF ONE.

Duratek