If one wants to be totally objective and unemotional then this chart of the VIXʼs Devation from itsʼ 50-day moving average shows that we have a screaming BUY signal. As the red circles above show all major lows in the last 10 years have had VIX deviation from 50-day moving average readings north of 15.00, the PRESENT READING IS 26 !! All of these lows saw significant market snapback rallies as follows:
· 1998 Reading Market Up + 27 % (3 Months Later) and + 36 % (6 Months Later)
· 2001 Reading Market Up + 22 % (3 Months Later) and + 22 % (6 Months Later)
· 2002 Reading Market Up + 14 % (3 Months Later) and + 19% (6 Months Later)
If historical evidence holds correct then this reading should provide a similar solid tradable rally.