Where's the market heading short term?

Given this market's bi-polar nature (intraday Fear to Greed swings are now the norm) I like using the "Fear Index" as an indicator for short term fluctuations (ie when to cover my shorts and when to nibble at some longs).

Short Term we should find ourselves range bound (we tested a breakout at 80 and failed) but there is still a clear upside bias


Longer term its obvious that the old days of 15-30 VIX levels are gone. 45 is definitely the lowest we'll ever see now in 2008 and 2009. I am so sure about 45 being the "38th parallel" that I'd love to see a jolly holiday rally at the end of 2008 to get us down there, where I would then proceed to load up on shorts, but that will definitely not happen.


Of course this is just technical analysis. We are assuming where possible support levels and resistance levels may present themselves. The operative question is whether the future economic fluctuations will give the VIX the fuel needed to boot stomp its way beyond the 80-89 level in 2009? If that happens then the market will likely be at 6000. I'll try answering that in my next post with the help of Nouriel Roubini and others.