Thursday, 27 December 2012

Volatility drops into the close

With another political comment causing the indexes to snap back higher, the VIX flipped back to the downside, closing -0.01, to settle @ 19.47. The earlier break above the 20 threshold is the most aspect of today's somewhat roller coaster day.


VIX'60min



VIX'daily



VIX'weekly


Summary

Lets be clear about one thing today...

The VIX broke the key threshold of 20.

Yes, it closed under 20, and yes..it even closed fractionally in the red.

Yet, the damage HAS been done. The warning signal has been triggered.

If we are going to see volatility spike into the 30s..and even 40s in early 2013, this sort of crazy swing is to be entirely expected.

Get used to it.