The VIX, as an indicator, only really works at times of fear, not complacency. So when anyone tries to use the VIX as an argument that the market is complacent, they are wrong.
I use many many indicators (I look at over 70 charts to give me a sense of what the market is doing daily... yes daily), but I rely on the VIX quite a bit. For example, it was the VIX that primarily indicated to me to sell my entire portfolio, except for the market short, the Thursday before the weekend Lehman went under.
In a normal market, using the VIX to show a sign of a market top is extremely difficult, but it will show signs of a market bottom (you just have to know how to look at the data). In a trader's market, it will show signs of both. We can witness the irrelevance of the VIX spotting market tops in any bull market, and the relevance in trading bottoms and tops from July 2007-to-present.
At the moment, a quick look at the VIX would suggest we are still in the "trader's market" stage, but I think that is going to change as I highlighted such an opinion about two weeks ago with 'Market Thought... maybe, just maybe'.
The markets are getting to that point where the VIX can go down, so any time media outlets start preaching complacency, its technically not correct.
Don't get me wrong, no indicator should be ignored. But I think we maybe approaching a situation where we will not be able to easily highlight market toppiness w/a low VIX anymore.
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