VIX and DOW Update 6-11-2012

One alternative Indicator to gauge Traders behaviour or Fear Level is the VIX.

This is one of the latest technology or indicator used by professional traders, aside of NYAD and GOLD:DOW ratio.

VIX usually shoots up 3-5% in a day when traders FEAR the markets, now Spain bailout was announced, and VIX dropped 5% to 20s level.

There are certain levels when people are too bullish and too bearish. There is a good exit and buy opportunity using this. Please see below.

Although recent 10% decline shoot up only to 25 level in VIX. Far from BUY signal at 40 and above, the FED and ECB fastly cut off the negative vibrations, thus cutting VIX as well. Well in the case it happened again like in Oct2011 lows, Vix hit 40 and above, and Weekly RSI at 30.0 below, who wouldn’t BUY into the markets.

Good Luck.

Posted Bullish DOW at Super Bearish DOW forecasts as well in technical terms.

BULLISH and current count:

 

BEARISH: