Markets still very scary looking

I'm traveling out of the country so very I've done few posts lately.  But tonight I'm looking at two pretty scary charts that I will share.  The first is the VIX, also known as the fear chart (or inverse complacency chart).  As you can see, it is now at the same level as precrash April 2007 even though the world economic system teters on the brink of collapse and there are wars and rumors of wars the world over.  Perhaps people have put God-like faith in Bernanke (or shall I just refer to him as Mammon from now on?).  Who knows why anyone would trust this con man?  Probably because it's their job to run a retirement fund, etc. and so they are just doing their job.

But I have seen this kind of VIX setup over and over again and it is not a sign of straight thinking by longs.  If they are comfortable of being in the markets because of Bernanke's support, imagine how quickly it could all go to $hit if (when) he finally has to make a decision between bankrupting the Federal Reserve bank (a privately owned bank by the way...) and letting massive deflation hit the world and the US like a ton of bricks...

The other chart that concerns me is the junk bond index (ticker: JNK). As you can see it is forming an ending diagonal that looks like it could easily result in a double top. I call this formation "owl ears" because when the right hand side collapses it looks like a silhouette of an owl. This is just a really scary setup for collapse.

The JNK ETF is considered by some to be an indication of complacency but I think it is an indication of greed.  Fund managers have been promising 7-9% returns to their retirees, insurance policy holders, etc. in a world where 3% is damned hard to come by.  So they are forced into higher risk, crap assets which is why they are called "junk bonds".  Folks, if you have someone else managing your money, especially if it is a state run fund of some sort, some of your retirement cash is in junk bonds.  How much you will never know until they go bankrupt.

The reason people pile into worthless Ponzi "assets" like this is simple: Bernanke is holding treasuries near zero percent at a time when people are counting on income.  So they go looking for it whereever they can find it.  People have been taught to foolishly believe that it is possible for their money to "work" for them while they sit around.  In truth they are gambling and they just don't understand the math because Wall St. has sold hem on a Ponzi scheme.  One day, everyone will run for the door at once thinking that they will be faster than the next guy.  Not everyone can be the fastest.  In fact, most must mathematically get creamed.  That's just the way a Ponzi works, like it or not.