Big Caution!!

3/25/09

The following is posted by another well known equity technician.

A simple message ... Keep an eye on the VIX.

Something is not right ... its the VIX.

First, take a look at the S&P 500's action since last September. Note that it started its severe correction at that time.

In the past week, many investors are happy with glee, thinking that a nice and safe Bull rally has started ... after all, the January/March resistance line has been broken to the upside.

Sounds good, but there is more to the story ...

Since last September, the VIX has formed a huge triangle that is coming to a breakout point soon. As of yesterday, it has NOT had a breakout. And yet, many feel as though the S&P is acting like the VIX already had a breakout to the downside (down on the VIX is market positive on the S&P).

This non-confirmation condition is a Red Flag and should be carefully watched by investors.

You make your own conlcusion. Now, Mr President is proposing $3.6 Tillion fiscal budget spending for year 2010. Damn it!! Now, our wise adminstration keep printing money to solve our problem. I 100$ sure it will produce another huge crisis after if they solve current crisis. What if the current action fails?! I guess time will tell.