Interpereting the VIX

["David Bond" <mr_bond@xxxxxx>]

List,

I found this tidbit on the web regarding interpereting the VIX:

". The VIX’s reaction to a short market pullback of a few hours or a few
days is an excellent indicator of how market participants are currently
reacting to the market and what they expect will follow. If market weakness
is met with an increased demand for puts, the VIX will spike upwards. Such
spikes are a telltale sign of fear in the market, which is a very healthy
and bullish sign for contrarians, as speculators will tend to buy puts after
they have sold out of their long positions. This often signals an end to
short-term selling pressure. If the VIX does not increase on a pullback, it
signals that the public is meeting the market downturn with complacency and
has expectations of a quick recovery. In these cases, there is often more
downturn to follow"


I was wondering if anyone has found that the opposite of the above is
true -- that the vix will actually diverge from price and "lead the market"
(that is, on an intraday basis).  My limited observation has shown this to
be true to some degree.  Comments?

Dave