Hat tip to Martin Armstrong - this one's for you! - Decade-old predictive model still "working"

Martin A. Armstrong, whatever may be said or written about you (including in the Wikipedia article about you and your Economic Confidence Model) - looks like that model is still "working" for timing in cycles dates for one economic confidence indicator, the volatility index (VIX). I don't know if you'll get a chance to view this chart, but I've marked onto it some notes showing how your model's high-low dates seem to be respected by the VIX. Specifically, the VIX continued to weaken and droop into the February 2007 confidence "high" date, then rose into the March 2008 "interim low" date, and reacted down again. Obviously the fundamental picture was so bad, it dragged the markets down and the VIX higher - including a spike, consolidation, and then gap as VIX surpassed the March 2008 closing high - on its march up into late November 2008. Now as we're approaching the April 2009 "interim high" date (which I calculate to fall mid-day on Monday, April 20), we see the VIX nosing down to the area that's not only by the lower Bollinger Band and the 35 gap area ... it's also revisiting the support level formed with that March 2008 closing high!

There's other anecdotal evidence of improved confidence, partly from the equity markets' rally and partly from that CNN survey data I posted earlier today here. It isn't scientific, but I was fascinated to see that the ratio of those responding and agreeing with President Obama that there are "glimmers of hope" rang in at 65%, with 35% not agreeing. That ratio is very close to the Fibonacci "golden ratio" of 61.8% to 38.3%. So close, in fact, it makes me wonder if it's sort of a "wave 2" pullback of confidence, in a manner of speaking. With the likelihood that it gives way as the fundamentals present an increasingly grimmer picture over the next couple of years.

If the VIX reacts to this Economic Confidence Model interim high date as it did to the interim low date in March 2008, then we expect the VIX to rise notably. Then what? might the VIX roll over later, to fall yet lower - the inverse of when it turned up to rise higher in late 2008? Perhaps - or perhaps the fundamentals will pull it higher, just as they pulled it higher in late 2008. Either way, it's beginning to look reasonable to believe that the VIX ultimately will have significantly higher levels to visit over the next couple of years, into May 13, 2011 (which I calculate from the model's 2011.45 low date).