So the rally is 2 hours old, and of course it's time to start determining whether that was THE Bottom, whether this pop lasts, blah blah blah.
So hey, let me throw another unknowable question out there, how low does the VIX go here before it settles.
Well, we're not going back to the "normal" 20's any time soon, I'll underwrite that.
A logical "guess", or at least the one I am going with, is that we dip below the magical 10 Day MA line. The old rule says that 10% below is a sell signal (for the market). My anecdotal observation is that using this indicator for market buys and sells does not work in the direction of the trend, but works OK in a countertrend move.
In other words, in a down market, an oversold VIX is a decent spot to look for market sales. An overbought VIX in this enviroment is obviously a disaster as a signal, I mean even after todays 9% drop the VIX is still technically overbought.
I would note though that the VIX remains very high in light of today's rally.
But whatever, Power Lunch on now, they'll surely enlighten us.
