since 2000, i followed these 3 indexs many times. no matter in bull or bear mkt, when majority such as media/individual investoer reached extremely bearish level, stock mkt will turn around and rally in next 1-3 months(average sp return 26%), sometimes it begin a new bull mkt(between 2003 to 2007).
on march 16, 2008, when bear stern was taken over by jpm for $2 just like a bankrupty(previous close 30). mkt reached the midterm bottom (dow; 11800, naz: 2120, spy; 1260). Just like what old saying, a bear mkt always end with a famous, big company bankrupty.( i bot back all 401k that day)
lets go back to check those 3 indicators: vix reached 36, put/call(near 1.4), b/b reached -12.5%(lowest in 10 years)
(see pictures above)
a good strategy for trading is: ether buy mkt leader such as sohu bidu rimm aapl fslr..,and their near term option or leaps; or buy pro etf such as qld ddm(safe, and good for big money play for 3 months to years timing)
