sentiment indicators

Fear is out of whack

The VIX is at the junction of the 2008 turn from hysterical fear to relief. That’s fine, the COVID-19 scare and its economic implications are considerable.

vix

But when viewing VIX (inverse view shown here) and SPX on a log (percentage based) scale chart something is out of whack. Either this is as bad as Armageddon ’08 was or there is a massive snap back in sentiment setting up as inverse VIX has crashed while SPX has merely taken a routine – though violent – pullback in relation to the 2008 waterfall in stocks.

vix and spx

I am not promoting a bull or a bear. Just showing pictures at this time and asking questions. Either sentiment is out of whack as the herds panic first and think later or the stock market has not yet, even after all this angst, gotten the memo that the world is ending. Personally, I don’t trust the judgement of thundering herds, especially when driven by words like “GLOBAL PANDEMIC!!!”

Buy hey, VIX could be right I guess if the enchilada is truly going to unwrap into global deflation. But taken at face value, that is a striking picture just above.

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