January 2nd of 2009 will likely mark an immediate term capitulation of this correlation, much like that of November 20th, 2008. On November of 2008, the VIX peaked +52% higher than Friday’s close at 80.86. On that same day, the SP500 bottomed -24% lower at 752.
My immediate term overbought/oversold macro levels for the SP500 and VIX, respectively are now at $925.88 and 38.87. Don’t get suckered in at immediate term “Trade” bottoms or tops. That’s not going to make you a winner in The New Reality of 2009.
Keith R. McCullough
CEO / Chief Investment Officer