Users: Amy: MarketTech Reports: Market Top Indicators - VIX

Continuing the indecisiveness trend over the last week, the market today refused to rise or drop by any significant amounts.  As mentioned 

, there are several signs the market looks to be approaching a peak.  Lets take another look: the VIX.

As most are aware, the VIX volatility indicator has a great correlation in the last few years to the stock market peaks and bottoms.  Low volatility readings has almost always indicated a local peak in the S&P. Below is the VIX for the last 2 yrs.  There has been approximately 5 times in the last 2 years where the VIX has fallen to a reading of ~15, circled in blue.  (2011 - Feb, May, July)  (2012 - Mar, Aug)

Below is the S&P 500 index for the same period.  Each of the 5 lows in the VIX marked a local high.

Based on the VIX indicator, there exists a significant chance that the market is at a local high.  What is particularly compelling here is that the indicator has been very accurate and in each case, was followed by a large drop of >6%.  If the trend holds, a drop may start within the next few weeks.  Also interesting to note, each drop took an average of approximately 2 months to bottom out.