Maybe one question sums things up best in these difficult times:
Q: Gary, how can the market proceed much higher with the Volatility Index, or VIX, and the QQV (which measures volatility of Nasdaq 100 Unit Trust (QQQ - commentary - Cramer's Take) options) both at near-record low levels? History shows that a correction is nearer when these indicators are where they are now. A sustained advance higher at this time would break new ground, wouldn't it?
A: Actually, no. In fact, as the chart below shows, the Nasdaq had its greatest rally ever with the VIX locked in a fairly tight trading range. And, lest you think I'm just cherry-picking, the Nasdaq had rallied consistently from '94 to '00, while the VIX exhibited the same basic action.
My feeling is that we've become accustomed to viewing the VIX (or QQV) as a magic indicator. But once everyone starts looking at something else, that magic dies quickly.
Today, the Nasdaq, Steak n Shake (SNS - commentary - Cramer's Take), Option Care (OPTN - commentary - Cramer's Take), Humana (HUM - commentary - Cramer's Take), InVision (INVN - commentary - Cramer's Take), Expedia (EXPE - commentary - Cramer's Take) and Calpine (CPN - commentary - Cramer's Take).
And that is the final word from backstage at the Grammy Awards, where I have had more than my fill of U2 lately. The Super Bowl. The Olympics. The Grammys. Enough! And Bono, I beg of you, please get some new sunglasses!
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