Keystone's SPX:VIX Ratio Indicator

All three drops, shown by the red circles, were large broad market selloffs, as expected when the ratio falls under 68. As long as it stays under 68, a short-the-rally mode is in place. If the ratio moves back above 68, the market bulls are running strong again taking the indexes higher. This move back above 68 would only set up for the next drop under 68 which will be a large selling event for the indexes again.

Any way you slice it, the markets are not healthy these days. Broad markets will continue along with a downward bias as long as the ratio stays under 68 and leaks lower. Once we see 40-ish and lower we can start thinking about a sustained rally but that is not in the cards in the near term. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.