How do you know when the panic buying via short covering ends? How do you know when the longs who have twenty years worth of gains at the FDIC insured bank rate in just a little over a year might want to lock in those outsized gains?
In my opinion there's a limit to how low this low fear trend can go. We are breaking new record low ground as we speak on the VXN 50 day moving average so maybe it's one of those "new pardigms" like those 26 average P/Es in the late '90s? Maybe not.
If this was short covering, I think we'd get much greater spikes in the averages. The slow steady grind tells me there is just continuous money flowing in from the sidelines. Volumes are low as there are few that are selling...more churning higher than anything else. Short covering will begin when we start to get big spikes up in the averages. I think coming soon.