When the VIX is low...

Take your money and Go. When the VIX is high, then you buy. That's how the saying goes anyhow.



You can see from the chart comparing the S&P 500 index to the VIX, the Volatility index, that when the VIX is low its time to get out. Its a pretty good correlation that when volatility is high stocks move up, so why are stocks moving up and the VIX is scraping bottom? For the same reason I have sat out this rally since May. Its fake. Its electioneering, a bear trap, and in typical wall street doublespeak, a bear trap is not a trap set for a bear, its a trap set by a bear.

When will it tip over? Conventional wisdom would predict it will last until the election. But if you believe that, would you wait until then or would you cash out ahead of the crowd?

As Yogi Berra has astutely pointed out, "its hard to make predictions, especially about the future". I'm staying on the sidelines and watching. If the market charges ahead, I missed a good rally, if it tanks, I've avoided a beating. As a chaotic system driven by emotion the only thing for sure is that something will happen... it always does.