5-10 = extremely low anxiety = extreme complacency
10-15 = very low anxiety = high complacency
15-20 = low anxiety = moderate complacency
20-25 = moderate anxiety = low complacency
25-30 = moderately high anxiety
30-35 = high anxiety
35-40 = very high anxiety
40-45 = extremely high anxiety
45-50 = near panic
50-55 = moderate panic
55-60 = panic
60-65 = intense panic
65+ = extreme panic
You can feel fairly comfortable if VIX is moving in a range between 18 and 27.As we have noticed lately, VIX has been in a range of 30 to 48 since the second week of August.
According to the table this represents high anxiety to near panic.
Where do we go from here?
That is a very good question as the charts seem to be giving us two divergent answers.
Old school point and figure charts are suggesting a near term target of 28 (moderately high anxiety), while other interpretations indicate higher levels than what we have recently experienced.
Needless to say, if the point and figure charts are correct, we are in for a significant rally, while if the other charts are correct, we could see the S&P drop to the 1010 to 1040 range.
I am leaning toward the rally based on my interpretation of the charts, but this could be a contrary indicator. :)