Wednesday, July 27, 2011

"VIX Rises 14% to Highest Level in Four Months on Debt Impasse" (VXX; TVIX)

We thought this chart was important enough to post it on both July 11 and 18:
"A rare VIX pattern is appearing again ..." (VIX; VXX)
Updated: Rare VIX pattern appearing again (VXX; TVIX)

In between the posts I dropped a comment at MarketBeat:
And the VIX, up 24% in two days is at the 19.87 level which in Chaldean numerology and for quite a few money managers came to be interpreted as “Would you like fries with that/”
For those with a more mystical bent there’s technical analysis.
A series of higher lows for the last couple months might mark a turn.
Here's the latest, from Bloomberg:
U.S. equity derivatives surged, sending the Chicago Board Options Exchange Volatility Index to the highest level in four months, as a stalemate over the debt ceiling pushed the nation closer to default.

The VIX, as the measure is known, rose 14 percent to 22.98, a level last reached on March 18. VIX August futures added 8.4 percent to 21.3, while September futures gained 5.1 percent to 21.75. The gauge tracks the cost of options linked to the Standard & Poor’s 500 index, which lost 2 percent.

The VIX has risen 31 percent in the past three days as politicians grapple with raising the U.S. debt limit and cutting the budget deficit. House Speaker John Boehner’s reworked deficit-cutting plan gained support today among his fellow Republicans, while Senate Majority Leader Harry Reid said his competing proposal to avert a potential U.S. default offers the only “true compromise.”...MORE
That's 31% in three days and 44% since that July 11 post.
Sometimes you get lucky.