Thursday, April 15, 2010

VIX Index also points to a correction

Another piece of data from yesterday's close points to a 3 year new low. It is the VIX Index which measures volatility in the market. The last time the VIX was this low was in May 2008. That was the beginning of the big drop in the Dow as well as other indexes as shown on the Dow chart with the Blue line. When you take this piece of data along with the Put to Call ratio data from the previous post, it is clear to me we are approaching a MAJOR correction period. I can't predict the exact timing but this could start the decline culminating in the Sept./Oct. period. This is about how long it took to play out last time if you look at the Dow chart. Time will tell.

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