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Volatility (VIX) is trading down another -3.3% here, and if it can close below the 21.53 line, that's bullish, on balance for the US stock market. Conversely, a close and breakout above that line, would be bearish.

Sentiment has turned ragingly negative in recent weeks. If you don't believe me, believe the math. The Institional Investor weekly survey is as lop sided to the bear side of the trade as it has been all year. Bulls are at 30% and Bears ticked up again to 50% this week. The spread here is what I care about. From a contrarian point of view you want to be long the US stock market on a weekly data point like this.

KM

(Picture: http://www.yourtradingstock.com/wp-content/uploads/2008/02/bull-bear-ratio-01.jpg)