I believe it was jaolsa or volitaire that pick the 15th/16th august as the new low two weeks ago. I listened to that recommedation and got out 95% cashed up and did some further investigations myself and you guys on this thread, prophet, gse, fundas, fairsight.. and if i've forgotten anyone sorry.. But this thread would have to be the best on HC!!
Anyways, heres my 2 cents worth.. I've stolen this of a webiste but found it very interesting.. the Volitity seems to be just beginning.. GOOD LUCK
"The NYA New Highs ...
New lows are at a historic high were previous bottoms occurred, however ... New Lows are remaining, and lingering at this high level. When will it have its drop? For the answer, I looked at historic Volatility (VIX) levels and looked for a correlation.
Think about the logic here ... New Lows happen because investors are afraid of stocks moving lower so the sell. It isn't until they stop being afraid that they stop their selling, so if the VIX is showing continued or increasing fear levels, then the fear is still in place to keep the New Lows at a high level.
It turns out, that on peak VIX moves, the VIX had to drop for the New Lows to start its dropping process. So, have Volatility levels peaked, or are they still in process of rising? See charts 1, 2, and 3 below for the answer. This is a must see analysis. -----------------------------------------------------------------------------------------------------------
This is a long term chart of the VIX peaks in 2001 and 2002. Below the VIX, is a VIX MACD chart that correlates with those peak moves. We are now experiencing the highest peak level since 2001/2002. See the next two charts for how the VIX MACD signals when the VIX's Volatility ends. (Look at the red vertical lines for the peak moves. The blue ones are for trend up shifts on the VIX.)
This is the close up for the 2001 to 2002 peak VIX levels. Note that the VIX Index continued to move up as long as our VIX MACD indicator continued up. The VIX made its final peak and reversed AFTER the VIX MACD peaked and made its turn. Once the MACD turned, the VIX had finished its final peak move. And, once the red MACD line went below the blue MACD line, then the market started to move to the upside in a trend that lasted at least a couple of weeks.
So, if that is the case, we should see the VIX MACD peak and turn when Volatility is ready to turn down. See the next chart for where the VIX is now relative to having reached its peak level.
I was surprised when I saw where the VIX MACD was this morning. Before that, I thought that the VIX Index may have already peaked. But, when we look at the VIX MACD, we see that it is still trending up and shows no indication of peaking and reversing down yet. Conclusion: Volatility is continuing to rise higher and there is no indication yet, that it is done rising and ready to come down. And the red indicator is certainly a ways from cutting through the blue MACD indicator line at this point.
(20min delay)