Tuesday, February 26, 2013

You can see this from the way the VIX moves

When the $VIX starts to pop to multi-week/month highs, especially after being compressed for so long as we've seen, it's a sign that there isn't just fear, but usually panic.  It never ceases to amaze me how everyone can be so complacent for so long and then all of a sudden run around screaming that the sky is falling.

Corrections are healthy in the market, Bull or Bear.  They let those that missed the first move get in, and those that are already in get a better add to price. Of course, a correction can lead to a top, but it's way too aggressive to guess at that being the case after only a few days of weakness.

Remember, the public is usually wrong.

Investor fear on the rise - CNNMoney
news.google.com
Investor fear on the riseCNNMoney"It was the worst possible outcome, feared by market participants and European policy-makers alike," said Daiwa Capital Markets European economist Tobias Blattner. U.S. stocks spiraled downward in a late-day frenzied ...

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