Tuesday, September 16, 2008

VIX:VXV Ratio at 1.16

The VIX:VXV ratio spiked to 1.16 at the open today, suggesting a high probability of an imminent reversal of the short and intermediate trends.

Put to call and other contrary sentiment indicators are supporting this reading.

Of course, the market is being driven by news of deteriorating macroeconomic conditions and fundamentals right now, so it may take longer than usual for this extreme sentiment reading to reverse.

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