The VIX (CBOE Options Volatility Index)

I am not smarter than the market.  I am not Warren Buffet.  I am just an ordinary person like most of you.  I did not go to business school, or work in Raffles Place.  As an american investor, Martin Zweig, once said:
"I measure what is going on, and I adapt to it.  I try to put my ego out of the way.  The market is smarter than I am, so I bend."

To know what is happening in the financial world, most people read financial news, investment magazines, newsletters, financial shows.  I am not discouraging this.  But I feel that they transmit market hype.  These spin stories are very misleading if you read it at face value.  It is very important to come to your own conclusions.  There are however, ways to measure objectively what exactly is the sentiment at ground zero level.

Practically every major indices such as S&P and STI is hitting resistance.  Most of them shows bearish divergence - meaning price is going up while technical indicators are coming down - indicating likely retracement.  But will there be a change in direction?
No one can determine exactly when or where the market will change direction.  However, it is possible to determine if the market is healthy or sickly.
I like to use the VIX as a confirmation of what the market is doing.  I do not use it to predict the direction.  The definition and charts of VIX can be found in www.cboe.com
Currently, the market is moving up, and I would like to know if the VIX confirms this upside move.
VIX measures the expectations of options traders of stocks traded on the NYSE and Nasdaq.  It is frequently called the Fear Index.  It moves inversely with the market.  I have 2 horizontal lines drawn.  At 49, and at 20. This is the monthly VIX chart over the past 10 years.  Circled are the years 2005, 2006, and 2013.

Currently, the VIX is as low as it has ever been for a long time.  I interprete this to mean that the level of fear in the market is now very low.  As long as it stays low, my bias is upside.  The last time the VIX was this low was in the years 2005, and 2006, where the stock market crept up to approach the 2007 highs.  See S&P monthly chart below.

Remember, VIX is used as a confirmation of direction.  I do not use it to predict.  From my experience, the VIX is more reactive than predictive in nature.  It simply tells me the level of fear sentiment at the ground zero.
Is the market going to do the same - to continue creeping up to its previous highs?