Chart of the Day: VIX versus SPX

Monday, June 23, 2008 | 11:00 AM

I came into the office this morning, and my trading desk started our week by discussing the VIX. We put this chart together comparing the "fear indicator" with the S&P500.

As the chart below shows, the recent lows have been accompanied by very large spikes in fear, as indicated by VIX.

Last week, we had a pretty big sell off -- but the VIX stayed relatively modest. That implies that a firm bottom (heh) -- at least one that is tradable -- has yet to be made.


VIX versus SPX, 1 yearV_ix_spx
Chart via Fusion IQ, Bloomberg


If the VIX were a stock, I would be a buyer . . .

UPDATE: June 24, 2008 8:48am

John Hussman noted in his commentary yesterday, “No Capitulation” that:

“despite the recent weakness, there is a strange “orderliness” to recent market losses – as if investors are convinced that there is some invisible safety net that will keep stocks in a trading range and prevent any sustained price erosion. That complacency may become costly. Still, stocks are somewhat oversold from a very short-term perspective, so again, we can't rule out a fast, furious spike to clear that condition."

Well said . . .



UPDATE: June 23, 2008 11:48am

I posted this before seeing Felix Salmon's Market Mover post on the following on: Adventures in Technical Analysis, Jim Cramer Edition.

I will respond to this later this week . . .



Monday, June 23, 2008 | 11:00 AM | Permalink | Comments (43) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



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If it is able to be will.
That it did not spike on friday tells you something...

I'd buy here too...too bad I don't need anymore "shorts".....which is really what that is in disguise.


Posted by: michael schumacher | Jun 23, 2008 10:59:08 AM

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