The Market Volatility Index (VIX) is provided by the Chicago Board Options Exchange (CBOE), and is their measure of implied volatility in S&P 500 futures. The VIX is a sentiment indicator, as it measures Puts vs. Calls (in a rather complex formula) to get a gauge of traders' complacency, optimism, or pessimism (risk anxiety).
Sentiment indicators, like the VIX, are contrarian indicators. That is, high optimism is usually a sign of a market 'top', while high pessimism is usually a sign of a market 'bottom'. Both high optimism and high pessimism are unsustainable, and thus are great indicators in market timing.
