Ur gonna have to looked up how the VIX is calculated to answer your question. This is how the VIX behaves: Market goes down, VIX goes up. Market goes up, VIX goes down. Market spikes down, VIX spikes up. Market spikes up, VIX spikes down.
Have seen bottoms/temporary bottoms formed when VIX was around 40-50. I believe VIX once reached 80 at some point in the 2008-09 sell off. It doesn't seem to be reliable at picking tops however. Maybe b/c it measures fear and not greed. The VIX bottoms out around 15 and stays around there no matter how long the market goes up. The market could go up for 3 months but the VIX stays around 15. Haven't seen it go to 10 or below. I think 14 was the lowest I have ever seen it go to. So, you could sell or sell short when the VIX reaches 15 but the market could continue to go up higher and higher....
I think the VIX could spike once again, I think the SPX will make a bottom under 1100, I still think sub 1000 on the SPX is a really possibility. Short the VIX above 50 go long below 18! Waiting patiently for TVIX to drop back below $25 before getting long.
Coincidentally, stumbled upon this VIX info. might shed some more light on the VIX. http://vixandmore.blogspot.com/2010/05/rule-of-16-and-vix-of-40.html
Can anyone explain why VXX is up 1% while $VIX is down 5.6%? I know it doesn't track exactly but this is a big difference.