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Volatility Index Continues to Fall

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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