The VIX Is Getting Ready to Take Market on a Ride

There is a lot going on in the world, but don't forget to keep an eye on the economy, the money and the markets. People may have grown tired hearing about the VIX, but the previous threads regarding the large wagers that the VIX hits 20 in the next 60 days shouldn't be brushed aside. Those bets expire on April 20th and 25th... a week away. And today the VIX high was 17.90, and is currently up about 18%.

Coinciding with the Boston Marathon bombing, the VIX seems to getting the attention of a lot of investors all of the the sudden, Again! It should be getting your attention as well.

Volatility's prolonged absence from the stock market appears to be coming to an abrupt end. After being largely invisible for the past nine months - coinciding with a sharp equity rally - several signs indicate that instability is coming back.

Call options buying recently hit a three-year high for the CBOE's Volatility Index, a popular measure of market fear that usually moves in the opposite direction of the Standard & Poor's 500 stock index.

"We saw a huge spike in call buying on the VIX, the most in a while," said Ryan Detrick, senior analyst at Schaeffer's Investment Research. "That's not what you want to hear (because it usually happens) right before a big pullback."

This hasn't happened since January 2010 which preceded a 9% drop over only 4 weeks in the market.

"On what planet is a CBOE VIX Index reading of 14 a fair assessment of near term stock market price volatility?" Colas said in a note to clients Wednesday. "A planet where Federal Reserve monetary policy still tightly holds the reins of capital markets, unless you have a better explanation of this clearly anomalous reading."

Colas is spot on. Given the tremendous presence of the FED within our current economy, the horrible jobs report every month, high and under-reported unemployment, and the troubles of the economies overseas.... how is it even possible that the VIX is constantly already above 20 (at least 20)??

Along those same lines -- did you hear about this on April 15, 2013... tax day? I'm betting you probably didn't

Insider Dealing For Insider Trading: Congress Guts STOCK Act Reporting Requirements

Remember that Congressional insider trading scandal? The one where Congress members were caught trading stocks and bonds on insider information, an apparent crime for everyone else but Congress? Well, after a lot of public posturing leading to the passage of a reform law (with resulting positive press coverage) – Congress is back to their old tricks.

Congress approved a bill Friday to eliminate expanded financial-disclosure reporting requirements for Senior Executive Service members, just days before the new requirements were to go into effect.

The bill indefinitely suspends the filing requirements for 28,000 Executive Branch employees, including SES members. The Senate approved the measure by unanimous consent Thursday evening. The House followed suit Friday.

VIX getting ready to take market on a ride

This is the first time I've ever heard of this "VIX" thing. Is it some kind of put option/short deal on the stock market?

The Stock market is controlled by a hand full of individuals. They pull out most of their money before it gets close to crashing and then use the last disposable profit to collapse the market. They then start all over and get rich. They work with the execs of some hedge funds to accomplish this. This keeps the top one percent well above the rest. It is all a really big scam.

reply to post by MystikMushroom


That's correct

From the article:

A call buy, which gives the owner the option to purchase the security at a certain price, implies a belief that the VIX is likely to go higher, which usually is an ominous sign for stocks.

Originally posted by rickymouse
The Stock market is controlled by a hand full of individuals. They pull out most of their money before it gets close to crashing and then use the last disposable profit to collapse the market. They then start all over and get rich. They work with the execs of some hedge funds to accomplish this. This keeps the top one percent well above the rest. It is all a really big scam.

In short, I agree.

I was in the market last year in Chinese solar - which did very well since the Chinese government gave their solar industry $2 billion. But I don't currently have anything in stocks. There is no point unless you go in with a specific purpose.

2 years ago I was into silver, sold that as well.

Originally posted by MystikMushroom
This is the first time I've ever heard of this "VIX" thing. Is it some kind of put option/short deal on the stock market?

The vix is a volatility index. VIX is short for volatility index. You can buy the vix expecting volatility to increase, or short it if you believe its going to decrease. I think it averages put prices on the S&P 500 stocks. The higher the put prices, the more volatility is expected.

reply to post by MystikMushroom


layman's terms

when vix is up/high the stock market goes on a roller coaster ride

Volatility During Crises: link
vixandmore.blogspot.com...

Hm, well that's not good.

It sounds to me like this is legalized gambling with our economy. Mix in the types of "substances" these traders often enjoy ... sounds like a real winning combination.