MDA - Market Direction Analysis

[kevinb]

Hi Augie,

Here's something interesting. I thought because the VIX and VXN are so closely correlated a plot of their ratio would almost be a flat line.I suspected though that it might have some occasional outliers which maybe could give some useful signals. After plotting it though I was surprised to find it shows a definite trending channel.



I can't unfortunately annotate the chart, but if you draw a trendline of the Jan 01 low, and then copy it to the highs, it looks very clean. Interestingly the current value of the ratio is in an area where we have traditionally got a lot of up!

I have no idea of the significane or otherwise of this info, and merely offer it up for comment.

Cheers


Kevin