Fear index VIX - "if necessary I can go down from here." DIA, SPY, TSE, CDNX, TNR.v, CZX.v, SST.v, MGN, CNU.v, FVI.v, BTT.v, OK.v, FXI, HAU.to, ASM.v

As miserable as it gets with general markets sliding this year and Dow making last week a new 6 year low, Panic VIX is not in the picture to the magnitude of panic with public selling at the exactly wrong moment in last November. We will refer to our entry on Dow ans S&P 500 before for clear understanding, but we here should make an important observation: VIX is not making new highs with new Lows in Dow, Fear Index is in a clear Down Trend so far, showing that professionals are not willing to pay huge premiums for PUT protection if the bottom will fall out again. Yen has made a double bottom below 90 and is going up to 99.23 now, Euro just has made a Double Bottom and US Dollar is sliding down so far for two days from Double Top Reversal formation. Risk appetite is back, liquidity is filtering down the system, Gold is screaming Inflation and Debasement of the paper currencies is working. With new Gold highs above 1000 even with consolidation in Cup and Handle Formation at 1000 level as average, Diminishing Fear will push money into Junior sector where valuations are still depressed to the levels of End of the world scenario.

For all our Junior plays it was always important:

1. Underlying Currency or Commodity is back in fashion (it has happen with Gold and Silver).

2. Country risk is not exaggerated. (Canada, Alaska are already back in play - Canada Zinc Metals CZX.v Chinese investment at over 100% to the recent market price, Mexico and South America are warming up, M&A is driving interest in Argentina: Minera Andes MAi.to - Robert Mc Ewen investment - Los Azules - TNR Gold TNR.v plays, next will be Africa with Chinese - when values will encourage investments even after heavy discounting for Mess).

3. Risk appetite will push money down the food chain driven by M&A in sectors which are working, play now is searching for value and next acquisition targets: Gold is the one which is on the radar screens now. Here VIX is coming into play and next Bear rally in Dow and S&P 500 will return Decoupling back with all our reinflation plays: China FXI, Grains HAU.to and Juniors in Gold, Silver, Zinc and Copper. VIX sliding below 40 and rallying Equity markets will Cry Inflation after Gold for the deaf ones, Treasuries will continue its Bubble Bursting cycle with flood of money coming back into "risky plays" equities, commodities and emerging markets - Money will chase the returns again and will flow in reinflation plays.

Panic Indicator VIX is signaling Greed. DIA, SPY, QQQQ, TSX, GDX, CDNX, CZX.v, TNR.v, SST.v, MGN, RMK.v.

Watered down by Trillions of freshly printed money Fear is ready to be replaced by Greed again. Please notice that this recent spike in Panic is nowhere near as dramatic as during the last year's lows. While general markets were retesting the lows, Gold broke higher and Gold shares are in breaking Up mode, VIX has made a modest by recent standards move up. Now it looks like making a rolling Top below MA50 and STO is pointing to a move down. Players are not ready to pay excessive premiums on PUT protections and are liquidating their Short positions. Markets are ready for a Push up from Here with any Obama's announcement.

Panic VIX - even panicking could be tiring. DIA, SPY, QQQQ, GDX, TSX, CDNX.

Very good chance that Mr Market is getting more Greedy then fearful, money Flow from Treasuries will find its way into bargains in equities. One percent of new money coming into Gold means 100% increase in Demand.

Panic and VIX is going down - time for Irrational delusion is Over. GDX, GLD, SLV, TNR.v, SST.v, MGN, OK.v.

Panic is receding, Irrational Delusion when all world seems to be collapsing and US Dollar looks like "Safe Heaven" will be a history as well. Time is for fundamentals to come into play. Shift from life preservation mode and into chasing gains available in the markets with massive reinflation effort will allow incredible gains resulted in Flow dislocated billions of dollars searching for value. Just one percent of money Flow into Gold will rise investment demand by 100% according to McEwen founder of Gold Corp GG in my previous post. Silver is much smaller market and Junior mining being the most risky of all was just obliterated by panic selling and naked shorting. It is already up 30-40% from low and fireworks to follow with decisive move down in US Dollar.

Panic VIX is over, Greed is coming back. DIA, SPY, QQQQ, TSX

Panic is over, VIX is steady on its course to sub 40 levels, Rally and Inflation expectations are already coming back with fresh printed US Dollars, watch out January effect: how the month will trade so will be the year. For us here it is only the reference point of US Dollar prospects: once "its safe heaven quality" will be out of the picture mass exodus out of the flowed financial system will be the name of the game.

VIX Fear Index: panic is fading, Greed is coming back. DIA, FXI, EWZ, GDX, USD, DXY

Auto bailout will bring Fear index VIX under 50 when fundamentals will start to be in relevance again. first victim will be US Dollar and its "safe heaven" play.

US Dollar DXY is close to Break down. GDX, AUY, SSRI, SLW, MGN

US Dollar is a hostage of General Bernanke, fighting the sacred war against Deflation. Something has to give and poor fellow will lose its "safe heaven" glamour now with back up from 8.5 trillion bailouts commitments. Fear VIX is going down, market DOW DIA is ready for a party, who will buy Treasuries below 2.5% for 10 years apart from the FED in QE? After BOE and ECB done with rates cut for a while US Dollar is on its own in the cold. Gold's eratic moves are tired of manipulation and you can not get any physical on a normal human being level in coins. General Bernanke is busy to devalue the dollar and Gold will be his friend from now, showing signs of life in so welcome inflation.

Fear and Panic VIX is going Down. FXI, EWZ, GDX, AUY, SSRI, SLW

Have you noticed recently that all news are awful, but market is turning around on the worst news and closing Up? Shorts are afraid to keep positions over the weekend. Before they waited for a bad news, now another QE programme could blow them up in a new found Bull in worthless currency in the end. Rally is in the making for a short term in markets.

Fear VIX is going down, Panic is out of picture for a while. DIA, SPY, QQQQ, TSE, CDNX, USD, GDX

Fear Index VIX is making definite break down from recent highs, panic is subsiding and Greed and chasing performance is coming back. Distorted picture of Value with Panic and Forced liquidation is changing to fundamentals and value in solid assets with clear Demand and Supply economics.

Dow DIA stages agressive rally after recent collapse. SPY, QQQQ

After CitiGroup C bailout Fear VIX has diminished and is on track to subside and be taken over by Greed and chasing performance. Bubble in treasuries is reinforced by Quantitative Easing when money are printed and FED is buying Treasuries and other debt instruments. Rebalancing is pushing funds to sell low Yielding Treasuries and buy Equities after recent collapse. Bailout of autos GM and F in any form will bring more fuel to this rally. Like we have discussed shorts were served Fried this week.

Fear is getting killed by Quantitative Easing. GDX, MAI.v, TNR.v, SST.v, OK.v, CZX.v, BVG.v

Saving the CITI Group has put last nail into Deflation camp: banks will not be allowed to fail any more. VIX has made a Double Top stronger reversal pattern confirmed yesterday's action. Please see our comments on US Dollar and Dow about recent new weapon employed by FED - Quantitative Easing by way of issuing new money and buying Treasuries or other securities in the open market. US dollar is screaming please let me go down and save you all from Depression. Most benefit will come to emerging markets and Canada's venture stocks which were devastated by Fear and forced selling. Greed is coming back and money guys will start to chase performance again.

Fear Index VIX indicating Reversal Down, confirming Dow DIA Reversal Up. DIA, GDX

We have a very good picture confirming Bullish Reversal in Dow DIA: fear index VIX is forming a Bearish reversal with potential resolution Down. Dow retest of Low happen with less amount of Fear: market participants were ready to pay less premium for Put protection and Volatility expectation is going Down. For a definite move in the Dow from deflation to positive Inflation outcome next weak Rally must be fueled by this weekend action on key to all things now US Dollar. Fed is fighting Japan style Deflation and flooding the system with the money, in order that all these flood came into real economy you need to return normal velocity of money. Fear and panic is leading to Fire Sell, downward spiral in markets with Dow as indicator is leading to further margin calls, redemption and Risk not taking. Money are stashed at the Fed on banks accounts. Spiral became self reinforcing: panic - fire sell - prices down - more panic etc. Fed can not leave it to "effective market" any more. There is no such thing with Fed in existence and more practical importance is that all economy will be killed by derivatives, Lehman was a turning point which showed that collapse will take down all financial system. Everything is on the table now: turn markets into Inflation expectations and try to liquidate all "bad derivative positions". If velocity will not be returned now in the form of Weaker US Dollar, higher Long term Yield which will lead to steeper curve and Banks ability to make money by lending, Flood will eventually happen, but too late and with much more water when all economy will be submerged under hyperinflation. This money creation and record deficits for years to come already making all things are hardly manageable in US Corp. But there is a chance and it must be taken. Please follow to Us Dollar chart.

Fear Index VIX is staging reversal after Dow Low Retest.

Fear as a very strong Emotion and you can not be at Ultimate Panic Stage for a long time. Stupidity is another story, and you my dear friend are the best to know it...We have made Low High on Dow Low Retest and it is a very positive observation. After brutal Sell off with unprecedented speed of decline we are back into chartered waters: public knows now that we can anticipate powerful Rally and started position itself today selling treasuries all across the maturity. Fear will subside and Greed will be chasing performance again. Once Fear will stop spinning heads around double Top on US Dollar chart will be a very good reason to address fundamentals of the "safe heaven" currency, backed by One Trillion deficit.

Fear Index VIX is confirming Bullish reversal in the Markets.

So far so good here in confirmation of Bullish Reversal H&S in Dow VIX is staging Bearish reversal in its chart. Less Fear - more appetite for risk, more Buying into Stocks, US Dollar is weakening as "Safe haven" helping to exporters to gain some legs while domestic consumers are underwater. Friday was really important: break out of 70 on VIX could lead to Double Top Retest and self reinforcing selling into the waterfall on Dow. Free White soldiers could be formed - strong reversal pattern, it did not happen with all those bad news - it is a good news.

Double Bottom Must be confirmed by Fear Index - VIX is staging a reversal.

Yesterday was formed strong Bearish Hammer. Today is the day to paint the chart for Programme trades to start buying. Once PPO will make a cross over VIX will drop like a stone and Greed will take place from Fear. I was right to take profit on Google GOOG puts and is open to market rally now. I will revisit fundamentals on Google later.