Is this the exception to the rule...?

Following our previous post we looked at all cases since 1997 where the VIX_OSC was OVERSOLD (>75%) and where the VIX_Fair Value was at least NEUTRAL.

Our Findings:

• The Bounce set up works very well in Bull Markets
• Bear Markets and Corrections usually show failed signals where the market continued to tumble
• All failed Bounce calls led to a brief bounce and subsequent (deeper) Low.
• The final Low usually comes within 1-2 month

So now we know.

• The high probabilty case is the BOUNCE scenario
• If we see a continuation of the fall then the BULL from 2009 is over.
• A failed Bounce could lead to some quick & deep downside action
• A intermediate LOW could be in place in AUG/SEP