From Mchugh's afternoon technical report........ Good Luck...
Big potentially Bearish development Monday, April 12th, 2010. This one could be a biggie. The Daily VIX fell and closed below its bottom boundary 2 standard deviations Bollinger Band Monday. The VIX fell to 15.58. The bottom Bollinger Band came in Monday at 15.67. Now this is not the sell signal. It is the set up for a sell signal. Once the VIX rises back inside the Bollinger Bands, above the bottom Bollinger Band, we will have a sell signal in the VIX.
Are sell signals in the VIX reliable and significant? Oh yes they are. Sell signals from the Daily VIX are rare. From August 2007 through April 12th, 2010, there were four signals during this period of time, three of which saw the brunt of the stock market collapse, the fourth coming on January 12th, 2010, which led to an 8 percent decline.
