TICK & VIX vs SPY

The tick index measures the very short term health of the markets by taking the difference between the number of stocks on an uptick and the number of stocks on a downtick. The Tick index sums up this difference for all stocks in the New York Stock Exchange.

The goal of the VIX is to estimate the implied volatility of the S&P 500 index over the next 30 days. Since the Financial Crisis of 2008-09, it has been associated as a lagging indicator, and serves you better to invest inverse of VIX extremes. When VIX is at or near all-time lows (10 to 15 / descending lows) it is a good time to bet that the markets will turn negative. When the VIX is at or near all-time highs (40 to 50 / ascending highs) it is a good idea to bet the market will recover.

Measuring the TICK and VIX vs. SPY is another way to guage where the market is headed. As I point out in this chart; the TICK and VIX are giving market participants positive readings. However, with an exception of the previous low volume holiday week (Thanksgiving) and a two day relief rally before US elections, the market has been in a dowtrend -- A downtrend with the VIX near all-time lows -- This can only mean one thing, the S&P (or SPY) has a LOT of room to go further down.

Tick Tock Tick Tock... Waiting for this bomb to explode. Possibly early 2013 -- Feb-Mar