QuantitativeExhaustion

TICK & VIX vs SPY

Short
INDEX:TICK   NYSE Tick
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The tick index measures the very short term health of the markets by taking the difference between the number of stocks on an uptick and the number of stocks on a downtick. The Tick index sums up this difference for all stocks in the New York Stock Exchange.

The goal of the VIX is to estimate the implied volatility of the S&P 500 index over the next 30 days. Since the Financial Crisis of 2008-09, it has been associated as a lagging indicator, and serves you better to invest inverse of VIX extremes. When VIX is at or near all-time lows (10 to 15 / descending lows) it is a good time to bet that the markets will turn negative. When the VIX is at or near all-time highs ( 40 to 50 / ascending highs) it is a good idea to bet the market will recover.

Measuring the TICK and VIX vs. SPY is another way to guage where the market is headed. As I point out in this chart; the TICK and VIX are giving market participants positive readings. However, with an exception of the previous low volume holiday week (Thanksgiving) and a two day relief rally before US elections, the market has been in a dowtrend -- A downtrend with the VIX near all-time lows -- This can only mean one thing, the S&P (or SPY ) has a LOT of room to go further down.

Tick Tock Tick Tock... Waiting for this bomb to explode. Possibly early 2013 -- Feb-Mar

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