There has been a great deal of commentary regarding the VIX being below 20 and how it is a sign historically that the market should be sold. Let me throw something your way.
Most would agree the late 1990's and early 2000's were abnormal because it represented both the upside and downside of a "bubble" environment. If you are making the case that a bubble (and therefore the 1998-2002 time period) isn't a normal environment, how then can you make the case that volatility during that same time period should be considered normal?
A VIX at 20 or below was only a sell signal on equities since 1997. In the early and mid 1990's it consistently traded below 20 and usually closer to 15. Has anyone considered that volatility might stay low for an extended period of time after 6 years of extreme volatility? That may not be probable, but I have heard very few suggest it is even possible!
For more on Volatility basics PLEASE read my friend Professor Succo's stuff...it is really educational and awesome. He has forgotten more than I may ever learn on the subject.
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