The Dow continues to trade into what we will now term the beginning of the extreme of extreme zones based on recalibrating these zones to take the higher V readings into consideration. V readings (our proprietary indicator that measures Market volatility. are now at 1540 (another new high), and they are now increasing at rather fast pace. These high readings are letting us know that when the markets move down the moves are going to be just as extreme on the downside as they were to the upside. Volume also continues to come in at the low end and VIX readings are now only 1.60 points away from testing their July 16, 2007 lows (15.06) and 6.60 from testing their 20 year lows set on Dec 11, 2006 (10.05). When one considers the high at 89.54 was set in Oct 2008, one can understand just how fast these values have dropped and just how arrogant the masses have now become. From being blind with panic and fear, these chaps have now moved to the “everything is fine and dandy” stage. If V readings should surge past 1600 and the Dow is still trading at or above 10,800 it will be another clear signal that the next major correction is going to last anywhere from 15-24 months.
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