Where is the bottom?

[Vanraw]

I am very heavy cash right now. (and glad). So the main question now is Where is the bottom. The link below is a interesting view on the fact that American investors have been not taking the euro issue as seriously as they should be. Chasing the bottom down to new bottoms as it were.

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I liked his last paragraph.

But I think there’s a bit too much insouciance in some parts of the American investment community about the downside potential from the European economic and financial situation when combined with what appears to be a below-trend economic expansion in the United States. I will feel more confident about having seen a bottom in the stock market if and when the VIX and its sibling, the VXO, get above 30, which would tend to indicate that a lot of fear has re-entered the U.S. stock market. I’m not hoping for this, but till then, I’m concerned that my fellow investors are not quite concerned enough!

This is some interesting stuff when you look at it historically. here is a one year view of VIX, which basically measures volatility based on Options trading. Look back at 3Q last year, when we took a dump. VIX was stable until after the dump and then it was ranging from low 30's to low 40's. This guy is saying that we haven't seen the bottom until we see VIX above 30. Its at 25.04 today.



Does this indicate the Bottom is still south of today's drop? Might be interesting to watch. Below is a longer trend with TNA added that shows the market value as it relates to VIX. Interesting stuff.