This is one of the most AMAZING charts I've seen for months.This is a chart of the VIX, also known as the Fear Index. The VIX measures the implied volatility for the market over the next 30 Days. It does this through a statistical measure of the put/call ratio.
Last night, in America, the VIX gapped down below the supporting down trend line. Then the white candle finished completely below the lower Bollinger Band. Something that has not happened in the last six months (see chart above).
So - why is this so amazing? Well - it suggests, firstly, levels of complacency in the market unseen in the past six months; i.e., a big majority of punters are not expecting a retracement in the market. They are expecting further upward movements. So . . . who's left to buy this market? hmmmmm.
A close inside the lower Bollinger Band would be a strong signal that this market is about to go into bearish mode.
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