The goal of the is to estimate the implied 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 extremes. When 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 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 vs. SPY is another way to guage where the market is headed. As I point out in this chart; the TICK and are giving market participants positive readings. However, with an exception of the previous low holiday week (Thanksgiving) and a two day relief rally before US elections, the market has been in a dowtrend -- A downtrend with the 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