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Despite tumbling as much as 5% earlier today, the CBOE Volatility Index (^VIX) could be the most bullish indicator on the Street. Sometimes referred to as "the fear indicator," the VIX has been in a downward trend through most of December, dropping nearly 10% in the last two last two sessions, and currently inching below it's 200-day moving average of roughly 25.75.

Generally, the VIX gauges the magnitude of coming market fluctuations, what the Street calls implied volatility. The VIX is not only traded directly and serves as a baseline price for calculating other market entities (ie "boring" stock options trade at a lower vol than names subject to bigger daily swings). Typically a falling VIX means options traders expect lower volatility for the broader S&P 500 benchmark, suggesting higher stocks in the short-term.

Big market swings such as we've seen in December are "supposed" to lead to a higher VIX. The curious combination of big moves and shrinking VIX levels has some questioning whether or not it has any predictive value at all.

"I hear a lot of people saying that the VIX is broken, it's not a tell anymore," says Jon Najarian, co-founder of TradeMonster.com. "I say just the opposite, that this is the best reading we've ever seen out of the VIX because a week ago it was screaming from the rooftops that we'd being going down."

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If past is prologue, and it generally is in markets as in life, the Financial sector could be poised for a decent rally in the next 12 months. At least that's the assertion of Paul Hickey, the co-founder of Bespoke Investment Group.

Hickey's theory doesn't rely on a sweeping solution to the European debt crisis or other fundamental imponderables. He's focusing on the similarities between the trading in bank stocks today and the price moves in Technology stocks after the tech bubble implosion a decade ago.

Back in 2002 the question was whether or not the stock market as a whole could ever trade higher without the technology stocks that had led the rally over the prior five-years. Two years later the NASDAQ had doubled from its lows, yet was still down 2/3's of its value at the highs and struggling to find a bid.

Today traders are focused on whether or not the broader market can rally without the financial stocks, a sector that started collapsing in 2007, bottomed in 2009, and has now doubled from those lows. The group has had a horrid 2011, leaving the Financial Sector SPDR etf (XLF) down 66.5% off its 2007 top. For those who rather read than play with numbers, 66.5% and 2/3's are effectively the same number.