It is my intention to begin accumulating insurance protection against the bear move in the form of ETF's that track 2xs or more the VIX-Volatility index. Based on the charts below, I feel the time to begin taking a position is now.
This first chart is the inverse VIX index, symbol XIV. This ETF moves higher as market participants become more and more complacent and comfortable with the world and stocks. I still find it hard to believe after the daily deluge of failed government attempts to put lipstick on the finance pig, stock investors are feeling giddy; according to XIV.
Putting that aside, closing outside the upper BBand, RSI2 over 99, is always a sell signal.
The next two charts are the opposite. The TVIX and VIXY move up as the investor fear level rises. With the world on the verge of collapse, one would think these stocks wouldn't be performing so poorly.
History is repeating: crash of 1929, crash of 1987, dot.com bust of 2000, housing bust 2007, Bear Stearns and Lehman collapse 2008. Today, same as all the other times, the Tulip Bulb Ponzi stock investors, are the last ones to figure things out.
Conclusion: If the market tops now or 5 months from now, the technical picture for buying insurance protection has never been better.
Time to average into these TVIX and VIXY plays every week or other week until the musical chairs, ponzi stock market catches up to reality.
Tim Kathlina
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