Whilst the indexes closed largely flat, the VIX closed just under 1% higher @ 16.05. With just 3 weeks until the new year -and ZERO sign of a fiscal cliff agreement, Mr Market is completely in denial about what is coming. If the market does have it grossly wrong, and no agreement can be reached, a major re-pricing of equities will be necessary, and the VIX will explode.
First upside target is the mid 17s. If that can be achieved after the FOMC announcement this Wednesday, then there is the likelihood of 19s later this week.
VIX '20, a key threshold - and one even the clown finance TV networks recognise as important, still seems out of range in the immediate term.
What is clear, when we do see VIX 20+, it will be a massive warning of trouble, and then my mid-term target of the low sp'1200s will become the immediate target.
More later..on the indexes.