The Return of Volatility
As we predicted the bet on the iPath S&P 500 VIX Short Term Futures TM ETN (VXX) has been fruitful. The VXX has bounced back 12% since we said buy.
We have laid low the past few weeks and the prudent trade was talked up on Feb 13th in Where will Stocks Go from Here? That was the same day we went 95% cash and have held that position ever since. Forget our take, the gain in the VXX is even more impressive in the past 5 days as the VXX has rallied 18%. The market has been more unpredictable than a blind bat on crack and volatility has finally returned. The news has been flushed with headlines over the instability in Italy and our problems back in the U.S. with the impending March 1st deadline. Fear has entered back in the market and it's in full swing.
The benchmark gauge for American stock options rose the most in 18 months as partial election results in Italy and the lack of a political deal to avoid automatic spending cuts in the U.S. sent stocks tumbling.
The Chicago Board Options Exchange Volatility Index (VIX), or VIX, climbed 34 percent to 18.99 for the biggest advance since August 2011. The Standard & Poor’s 500 Index slid 1.8 percent to 1,487.85. The VIX, which measures the cost of using options as insurance against losses in the S&P 500, closed at the lowest level since April 2007 a week ago.
Congratulations to the 7 people who follow our website and actually made the trade. For now, the headlines are ruling the fate of U.S. equities.
Best of the Blogs
Scanning and identifying the best blog entries every hour
- Housing Affordability: How Does the U.S. Compare to Canada, China, Australia, Japan, Ireland, UK | Financial Sense
- President Obama's 'Middle Class Economics' Policy Simplified | ZeroHedge
- Consumer Confidence Surges To Highest Since The Last Time Markets Crashed | ZeroHedge
- Get Ready For (Fraudulent) Higher U.S. Interest Rates | ZeroHedge
- "Monetary Policy Has Lost Any Semblance Of Discipline," Stephen Roach Slams "QE Lemmings | ZeroHedge
- Self-Driving “Fully Automated” Vehicles on German Autobahn | Financial Sense
- "Paid To Wait"? Microsoft Tumbles 10%, Destroys 4 Years Of Dividend Gains | ZeroHedge
The most relevant financial news and articles from the Internets
- Iraq Just Released A Video Of Airstrikes Against ISIS | Business Insider
- 'American Idol' Winner Phillip Phillips Wants Out Of His... | Business Insider
- 25 Ways to Make LinkedIn Work for You | BusinessWeek
- More Companies Are Switching To Subscription Models — Here's Why Wall Street Needs... | Business Insider
- Here's The Trick Olympic Athletes Use To Achieve Their Goals | Business Insider
- 2012 Honda CR-V | BusinessWeek
- Elon Musk's Appearance On 'The Simpsons' Reminds Us How Insane —... | Business Insider