I have rarely seen a bottom where every indicator was pointing to a bottom. At most good bottoms the majority of indicators are pointing to a bottom. However, one can usually find some indicators that are not at an extreme. The stock market is not a precise science and one must weigh the evidence.
Aside from the VIX there are some other indicators that are not lining up for a bottom. The Investors Intelligence bears are still very low, even though the bulls have pulled back significantly. At Rydex we see a similar situation where the number of bullish bets has shrunk but the bearish bets have not picked up.
The list of indicators pointing to some sort of a bottom is significantly larger than those not pointing to a bottom:
- The market will be maximum oversold by the close of trading on Tuesday.
- The market will be oversold on an intermediate term basis at the close today.
- The put/call ratios are showing extreme bearishness.
- The AAII survey is at an extreme consistent with bottoms.
- Hulbert sentiment is at a similar extreme.
- We are seeing TICK readings consistent with bottoms.
There are plenty of indicators pointing to a bottom but the fact that everybody is fixated on the one that is not is telling. I would be more concerned if everybody was focused on the bullish indicators. I expect to see a turn by the middle of this week.