VIX daily RSI has spiked to 75. This has occurred only 14 times in the past 20 years and included some major lows. 10 times if you add a condition that VIX spikes over 22. I ran a quick strategy that says if you buy on a day like that, 80% chance to sell with a good profit 3 days later. The couple failures have occurred in 2001 and 2008. 2001 was just a couple days early, before a big rally started, and 2008 was a real failure.
This isn't even a once a year event.
At the same time the NYSE daily chart doesn't look that scary at all. Looks like a pullback to moving averages.
Actually the broadest Indexes.. NYSE and RUT look the best.
Notice the magnitude of the declines on the days VIX RSI broke 70 last couple times. I'm thinking the Fear is way overdone here.
Edited by ogm, 29 December 2012 - 07:51 AM.