Chris Rowe

VIX, Investors Intelligence Data at Odds

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MY TAKE ON THE INTERMEDIATE TERM

OK, Freddie Mac (FRE) and Fannie Mae (FNM) are getting slapped silly. Lehman Bros. (LEH) is in play again. (What else is new?) Maybe the new home sales report and consumer confidence will knock the market down again by the time you read this article.

You've probably heard the financial media feeding off of your fear, reinforcing the bearish sentiment. But hopefully they mentioned trading volume has been at its lightest at the end of August. This means instead of the market being pushed down by sellers, it was down merely due to lack of buying.

While a ton of bearish news hit the tape at the end of this summer, the trend is that more and more stocks are breaking resistance levels, which is a very bullish sign.

This may not reflect on the financial news networks. It certainly doesn't reflect in the Dow 30. But it's happening. And when that happens while the Advisors' Sentiment Indicator gives the buy signal that it's giving, the market tends to rip higher for weeks to months.

In the meantime, time will tell why the VIX is so complacent while the Investors Intelligence reading shows bearishness at historically record levels.

Chris Rowe is the Chief Investment Officer for Tycoon Publishing's The Trend Rider. To learn more about him, click here to read his bio.