VIX Advances With S&P 500 as Traders See Higher Risk for Stocks

hithere

**I hope bulls will wake up from this madness. --HiThere

July 15 (Bloomberg) -- The VIX rose with the Standard & Poor’s 500 Index, a sign from the options market that the biggest three-day rally for stocks since March is poised to end.

The Chicago Board Options Exchange Volatility Index, as the VIX is known, gained 3.5 percent to 25.89. The S&P 500 added 3 percent, giving it a 6.1 percent gain since July 10. They have both advanced 25 times since the subprime crisis began in August 2007, according to data compiled by Bloomberg. The next day, the S&P 500 fell 18 times for an average loss of 1.6 percent.

“That is remarkable,” Randy Frederick, head of trading and derivatives at Charles Schwab in Austin, Texas, said of the tandem move by the S&P 500 and VIX today. “The VIX is expecting something here, either a pull back this afternoon or tomorrow.”

Both indexes rose on July 6. The next day, the S&P 500 retreated 2 percent. The volatility benchmark, known as Wall Street’s “fear gauge” because it almost always increases as stocks fall, reflects expectations for price swings for the next 30 days. Higher levels signal more risk in equities.

The government’s weekly report on jobless claims tomorrow may be spurring concern among investors, Frederick said. The U.S. unemployment rate has increased to a 26-year high of 9.5 percent. Consumer confidence unexpectedly declined this month, according to a Reuters/University of Michigan index on July 10.

“We’ve had some unexpected numbers recently,” he said. “There is probably an anticipation that could happen again.”

On June 29, the VIX returned to its level from just before the September collapse of Lehman Brothers Holdings Inc., as signs the economy is improving helped calm concern spurred by the worst recession in 51 years.

The VIX dropped to 25.35, putting it below the Sept. 12 close of 25.66. Lehman, once the fourth-largest U.S. securities firm, filed for the biggest bankruptcy in U.S. history on Sept. 15, prompting a freeze in credit markets. The VIX surged 24 percent to 31.70 that day and peaked at 80.86 in November.

buctusa

Lao Da, do not be too bearish.....................

MM is so black that everything is possible no matter Economy is good or bad.

ychen222

精神鼓励一下，我的感觉是这次冲锋是牛牛最后的疯狂了。

buctusa

Really?

I just turned bullish......

精神鼓励一下，我的感觉是这次冲锋是牛牛最后的疯狂了。
ychen222 发表于 2009-7-15 17:07

ychen222

我说的冲锋可以持续几周的，NASDAQ也许能接近2000点。
但大熊市不能否定。

slcgh

mary666

ding

QQQ

hithere, get more SRS today at 18.6's?

happywacom

being a bear needs courage

hithere

hithere, get more SRS today at 18.6's?
QQQ 发表于 2009-7-15 19:44

yup.

dara

Hi, HIthere

Ding Ding 兄弟.

Though I do not always agree with you, but you are a nice guy!

QQQ

10# hithere

great, first target for 18.6's entry is 20.50

dara

watch SPG(like JPM in Finance)

Last time when SRS was 17.x SPG was 57.x.  If SPG goes to 56 this time, SRS will drop to 15.5~16.5.  SPG had a 1B seconding offering at $50 per share month ago. It had very strong support at 46.x.

QQQ

Thanks, But I don't what FA will support SPG to go another 10% from current 50.70
20.50 is about 10% gain from 18.6 entry, I will take it if it reach that tomorrow

Persistance

Thank you!  Still holding IYR puts (ST) and loaded some SPY puts before close (based on creazy high of RSI), waiting for pullback.

dara

Actually those REIT stocks have a very high dividend, like NLY 15% right now.
I guess they  are trading so low because people are fearful that they will go bankruptcy.

Right now SRS is like trading a twin brother with SKF. But I see SRS decays even fast than SKF because REIT trading volume lower than FIN so having higher volatility

stringzero

Hoho. SRS