Bring on the fear.

In this recent post I looked at the VXX chart in order to understand where it might suddenly turn around.  I think the markets are far, faaaaaaar too complacent.  I think people have waaaaaay too much confidence in Bernanke's omnipotence and in the Bernanke put.   Below is the chart of the VIX.  This is not a trade-able ETF but it is what the VXX is priced off of.  The VIX chart is telling me that a near term bottom in market fear is eminent.   CLICK on the chart in order to see the whole thing in full resolution.

I think that the chart has broken out of the downward sloping trend line and that it is now doing the back test which will turn out to be the goodbye kiss.  I think the support line will hold because this will be the 5th of 5 waves down and so at the very least I expect an a-b-c upward.  This chart reaffirms my views stated in my post regarding VXX.

Bottom line: I think the herd is anticipating some news and that it will react to this news in a violent way leading to stock market index declines that most people will not have seen coming.  When the news happens, lots of people will say the markets are overreacting but in truth the markets have overreacted to the upside for the past 2 years.  The correct reaction to Bernanke's propping up of the markets should have been the fear that it was artificial.

Of course, those managing your money don't have the luxury of sitting on the sidelines lest you be angry at them for not making your money "work for you".  What a joke.  Money does not work for people and when it appears to be doing that it is just gambling in action.

Note: I suspect that gold and silver can be hit with the rest of the markets if they collapse.  Their charts both support the possibility of seeing one more wave down before finding support for the next big wave up.  Gold and silver have not yet decoupled from the markets like they eventually will become.  I would not sell but I would wait for lower prices if you are near a purchase point.

Use major dips in gold and silver as a God send; an opportunity to make your next scheduled retirement program purchase of these metals at lower prices.  These low prices will not last forever folk.  You can't fool all of the people all of the time.  At some point people will be piling into gold and silver like there is no tomorrow because, quite literally there might be no economic tomorrow for people who don't own some.