the bull... the contrarian, page-4

A couple of charts and thoughts.

The first is the US VXO index.

Cliff Doke , I believe it was, stated recently that the VIX(newer model) after bouncing over 30 meant new highs in 6 months and 12 months and so the correction is over.

Clearly the chart does not show that.

We have been through a period where the VXO was basing at around 10 and the market just kept rising.

However it looks like we have returned to the times of a base of 20 and spikes up.

This is either like the bear of 2000 to 2003 or like the period from 1997 to 1999.

This is what you would expect it being 2007.

So you would expect continued volatility to any eventual market peak and into the next major low.

Spikes up to 55 are possible and I am sure situations like 1987 would be maybe up to 100 even.

So any pullback to 20ish is a probable peak and only a sustained move below 20 says we are in nirvana again.

The second chart is the SPI.

We touch the lower trend line of the last leg up and that is unlikely to be broken.

The 5 day RSI (middle indicator) has broken 20 a couple of times and can't get over 80.

That is what you see in a bear trend. A bull trend is breaking above 80 but not breaking below 20.

All this only says where we are not what will be of course.