Apr
18
Written by:
Steve Patterson
4/18/2009 1:51 PM
Volatility Index Continues to Fall
In another sign that the markets could extend the current rally into something longer term, the CBOE Volatility Index (VIX) has fallen to a new three month low to $33.94. Sometimes called the fear index, the VIX shows the amount of hedging in the markets to ward against a downturn and rises when the markets begin to turn south. The drop the VIX over the past two weeks resembles the fall in the S&P 500 that we saw just before the current rally began. There was a break of resistance at $40 on the 3rd on April and the index has continued to fall fairly steep since.
Ultra S&P 500 Proshares (SSO)
You can play the VIX if you are an advanced trader but watching the index and making stock and index trades based upon is the method that I prefer. I am still long the Ultra S&P 500 ProShares (SSO) and added some June 24 Calls with the ticker symbol SOJFX this week. This is a very bullish position without any protection so I will need to watch the markets closely this week to see if there are signs of downward pressure that I should hedge for.
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10 comment(s) so far...
Re: Volatility Index Continues to Fall
Not heard of this index before so thank you for this post - very enlightening
By Cash flow forecast on
4/19/2009 2:54 PM
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Re: Volatility Index Continues to Fall
Thanks for informing us about the current volatility index. I never knew about this before.
By custom web development on
4/19/2009 8:17 PM
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Re: Volatility Index Continues to Fall
Here's hoping there'll be some good news on the FTSE aswell.
By Keeping Suppliers Happy on
4/22/2009 11:47 AM
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Re: Volatility Index Continues to Fall
This is great news. I hope the economy comes back, so jobs can come back.
By Cool Gifts on
4/22/2009 3:56 PM
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Re: Volatility Index Continues to Fall
@Cool Gifts:
Lets hope but don't count on it. My guess is this is going to continue for a long time.
By Data Entry Jobs on
4/23/2009 4:32 PM
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let it fall
let the index fall abit and let it clear out the mist.
the more it continues to fall the more big mammoths will fall and they will clear the room.
although i wish stocks get a bit range bound so that i can earn by arbitrage.
By handbags on
4/25/2009 3:29 PM
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Re: Volatility Index Continues to Fall
These stocks are rollercoastering like a
drug addiction!
By Gon on
4/27/2009 1:52 PM
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Re: Volatility Index Continues to Fall
Great article, Thanks!
By Google Conquest on
4/29/2009 6:26 PM
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Re: Volatility Index Continues to Fall
Care to share with us some tips on choosing the right stock or shares?Would hope to learn something from you since you read everyday and I believed you have great insights on the economy.
By Singapore Property on
5/4/2009 1:35 AM
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Re: Volatility Index Continues to Fall
The volatility index is about to fall below 34 which is a support line. It could drop another 5 points lower if it breaks that mark.
By Steve on
5/4/2009 10:22 PM
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