Soaring VIX May Signal More Trouble Ahead for Stocks - CNBC

US News
Page 1 of 4 | Next Page
Show Entire Article

Soaring VIX Index May Signal More Trouble Ahead for Stocks
CNBC.com | May 04, 2010 | 02:52 PM EDT

Europe's spreading debt crisis—combined with an overdue stock pullback and the prospect of the Federal Reserve withdrawing its economic support—added up to one thing Tuesday: Fear.

As the Dow Jones industrial average tumbled more than 200 points and safe-haven moves for US Treasurys escalated, investors sought protection with the Chicago Board Options Exchange's Volatility Index [ VIX 34.83  +9.92 (+39.82%) ], which soared as much as 27 percent in heavy trading.

The VIX allows investors to buy options protection against market tumult, and they took full advantage as the financial markets thundered. Tuesday marked the third straight triple-digit move in the Dow.

"When the stock market does this in conjunction with a flight to safety in bonds and a flight to safety in the dollar and the yen, then you should expect a jump in the volatility index," said Andrew Wilkinson, senior strategist at Interactive Brokers. "So we've got a nasty mix of so many different variables today, each from a different part of the globe, that's making for difficult navigation in stormy waters."

Stocks and the VIX tend to move in opposite directions, and Wilkinson said traders were leaning heavily toward calls on the index, which would indicate a trend higher in volatility.

Page 1 of 4 |

The VIX was due for this kind of move!!!

Survivor

I am more than a survivor; I am a
conqueror.

My goal is greater than to simply get
through my days. My desire is to conquer
each and every moment!
I do more than just enough to keep my
head above water; I swim the waters of
life with all my might toward the shore of
my destiny.
My long-term dreams are clearly placed in
the forefront of my thoughts. Daily, I set
out to make progress toward my goals,
driven by my passion. Passion is the
key that unlocks the door to my
dreams.
I prepare myself in advance for challenges.
I have a plan of action in the event of an
emergency. In the face of a difficult
situation, I know how to survive. Armed
with a plan and a will to fulfill my vision, I
can endure any storm.
I have the strength within me to complete
my daily tasks. I am equipped to handle
all that comes my way with absolute grace
and poise.
In order to be a conqueror, I am changing
my perspective. I refrain from
complaining about my workload.
Instead, I choose to be grateful for the
ability to complete it. The mundane
routine of everyday is an investment in my
future, rather than a burden.
My positive attitude and my new
perspective help me live a life of joy. A
heart filled with gratitude and joy is
what makes the difference between
living in survival mode and being a
conqueror.
Today, I choose to get past completing the
basics and become a conqueror. I embrace
an appreciative perspective and allow
passion to be my strength.
Self-Reflection Questions:
1. What changes can I make to my
perspective in order to appreciate my
life?
2. How can I shift out of survival mode?
3. What drives my passion?

Invitation to view thomas's Picasa Web Album - Slide show of Trades in ES

You are invited to view thomas's photo album: Slide show of Trades in ES
Slide show of Trades in ES
Feb 12, 2010
by thomas
I wanted to give a snapshot of trades done recently

Message from thomas:
Posting a slideshow of Trades
To share your photos or receive notification when your friends share photos, get your own free Picasa Web Albums account.