Chart Porn - Fear is Gone

I have been obsessed about the Volatility Index ($VIX) like many traders, as it doesn't seem possible for fear to drop this low. The hubris before the fall is palpable despite everyone knowing that economic conditions are grim and collapsing further in front of our eyes. Perhaps a P:E ratio of 500 is in the cards (we'll get to infinity before this secular bear market is over if Japan is a decent guide)?

A good way to examine the level of fear relative to stock prices is using a ratio chart of the price of the S&P 500 divided by the $VIX ($SPX:$VIX ratio). Looking at this ratio relative to recent prior peaks in the stock markets yields some good chart porn that I thought I'd share (18 month chart with the $SPX:$VIX ratio as a red area plot and the $SPX plotted as a black line chart on top of the area chart):



I'm declaring July an official bear month a few days in advance...