Daily Archives: March 26, 2009
Panics do not destroy capital; they merely reveal the extent to which it has been destroyed by its betrayal into hopelessly unproductive works.
Sir John Mills
We can see the VIX coming down from its all time recent highs. The VIX needs to fall further before we get a sustained rally. We can gather two things from the red line period (1) it was a lower volatility period than we have seen over the last 18 months (2) the S&P 500 experienced a multiyear bull market during that period.
What is the VIX? The CBOE SPX Volatility Index reflects a market estimate of the future volatility, based on the weighted average of implied volatilities for a wide range of strikes.