Finally, last Friday, the US stock market snapped its winning streak. Eight winning sessions in a row did not become nine, as the Dow slumped 37 points to 10,742. But even so, the US stock market has been delivering surprisingly strong performances of late, especially when one considers that the economy hasn’t been.
[Read more...]Deciphering the VIX Index and the Rally in Overconfidence
March 10, 2010 By Leave a Comment
Hip hip, hooray! Hip hip, hooray!
Our little big bull market celebrated its one-year anniversary yesterday, albeit in tentative style. The Dow managed to eke out an 11-point gain, while the broader S&P 500 fared only slightly better. Investors, it appears, are awaiting the next catalyst to keep the momentum going. But are they running out of excuses to buy?
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Fear is Cheap: One Good Way to Bet on the VIX Spike
Fear gives intelligence to fools, says an old proverb. Turning it around a bit, we might say that lack of fear makes fools of wise men.
In the market, fear – or lack of same – finds expression in many forms. The Volatility Index, or VIX, is one of them. Known as the “fear gauge,” the VIX bounces up and down based on what people are paying for options on the S&P 500.
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