Chris Rowe

VIX, Investors Intelligence Data at Odds

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The VIX reflects the price of certain options on the S&P 500 (SPX). If these options become pricier, it's an indication that investors are willing to pay more for them, which happens when investors become nervous or fearful. Hence the index's nickname "The Fear Gauge."

So what can we speculate is causing the discrepancy here?

Could it be that, while investor newsletter-writers are secretly complacent or even bullish, they are saying the opposite?

I mean, the VIX is an indicator that moves because money is moving from one place to another. In other words, the VIX moves because people are putting their money where their mouths are.

Does the Advisors' Sentiment survey show excessive bearishness (a bullish sign) because most newsletter-writers are afraid they will seem foolish for saying they think the market moves up from here (for now)?

This is possible, of course, but pure speculation. Although sometimes, when everyone is saying the same thing, it can be very difficult to say the opposite.

A MARKET INDICATOR OF MY VERY OWN

I can tell you one thing, from the perspective of a person who writes to more than 150,000 readers, I can understand how it might be difficult to tell the entire world that you think we see (and are seeing) an intermediate advance in this market.

I mean, people think I'm crazy. And that fact alone should probably be charted because it's a highly accurate indicator.

But when everyone thinks I'm crazy, that's when my Trend Rider subscribers and I typically make the most money. We can call it the "Chris Rowe B.S. Indicator" (where "B.S.," of course, stands for bullish).

When certain things that I watch closely in the stock market occur at the same time, I would have to estimate that, at least 9 to 9.5 out of 10 times, I'm dead-right about the market's move. If you check out my article on "Are Buyers Emerging from the Bearishness?" then you know what I think about this market.