In my market comments last year I frequently referred to the KEY turn dates of May 2 and Oct 4...when the directional trends of a number of important markets changed. For instance, the S+P 500 and Crude Oil both made important highs on May 2 (and the US Dollar made an important low) while on Oct 4 the S+P 500 and Crude Oil both made important lows (and the US Dollar made an interim high.)
Last year, as markets approached the KEY HIGH turn date of May 2, 2011, bullish enthusiasm was very strong across asset classes....silver was charging to $50 an ounce and the VIX traded down to a 4 year low...the COT data indicated that speculators were very aggressive buyers. I was anticipating that the (bear market) rally from the March 2009 lows was reaching a crescendo...but I was waiting for a confirmation that a top had been made.
May 2, 2011 turned out to be a significant high in a number of markets and prices declined into late June. There was a "bounce back" rally into July (which took a few markets like AUD, CAD, Copper to marginal new highs) but then most asset prices (except for gold) fell sharply through the August/September period into the KEY Oct 4 lows. During that break the VIX rose sharply and by Oct 4 it hit 46%...three times what it had been at the May 2 highs...a great indicator of a bearish extreme. Since the Oct 4 lows in stocks and commodities the VIX has tumbled to 17% this Friday....its lowest level since July of last year....as rising asset prices have dampened the market's anxiety.
Over the past several weeks asset markets have "wanted" to go higher...a "risk on" environment....especially since the Euro joined the party and turned higher in mid-January.