Yup, that is one of the many danger signs for the very short term, but there are still others like BP, NASI, NHNL and EPC that are "not ready". Remember that in the March and May bottoms we did get some very great extreme in sentiment indicators, enough, IMTO, to assure a 30% eventual run from the low (set in August) and thus any retrench here, even if in October we print a marginal new low on the Naz, should be followed by what I believe will be a fabulous year end rally, providing of course, that we do not develop excess optimism in the meanwhile.
By the way, one way to interpret the low VIX, particularly when more calls are bought than puts, is that no one is willing to pay "fair premiums" for calls because they do not believe a rally is coming. It would be useful if VIX and VXN were calculated separately for calls and puts and get a measure of the differential premium, relative to "Black Sholes", that would be an excellent measure of the expectations of future market movement rather than the VIX which measure the premium on both puts and calls intermixed.
