First of all, Its Tuesday and its ECB fine tuning operation day. Market is once again expected to open higher or rally because of ECB operation. As said in all my article, this year we saw maximum rally and higher open on Tuesday because of this ECB operation.
Coming back to VIX, its completely beaten stock. There is no doubt VIX can fall further as it is still in Contango but at the same time VIX will bottom around 10 like it happened during 1994-95 and 2006-2007. VIX at zero means there is no expectation of movement in SPX which is not possible. At the same time, VIX cannot spike more then 100, max it can top is 80 as it happened in during 2008 financial crisis. VIX around 100 means market is expecting very large movement in SPX which is only possible if FED and ECB printing press runs out of ink. http://www.freefdawatchlist.com/2012/08/trading-volatility-s-index-vix.html Same way, TVIX, UVXY, VXX cannot hit zero, they will do reverse split. I would be buyer of VIX September or October Out of money call at today's close. Also, VIX is not an asset its just a statistic, so don't put your life saving in it and then hope for a miracle spike.
The calculation of VIX is fairly complicated. Just remember, VIX will rally sharply if VIN is (greater then) > VIF.
The calculation of VIX is fairly complicated. Just remember, VIX will rally sharply if VIN is (greater then) > VIF.
The easiest way to check spot price of VIX@13.70 is http://data.cnbc.com/quotes/.vix
Near term VIX can be checked with VIN @14.88 http://data.cnbc.com/quotes/.vin
Far term VIX can be checked with VIF @16.47 http://data.cnbc.com/quotes/.vif
As it can be seen as of yesterday's close, VIF is (greater then) > VIN.
| VIX Term Structure - shows VIX contango. |
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| Vix 20 year chart comparison. |
Trading Strategies for August 14th:
For Bullish sentiment to continue, Dow needs to break 13,202 point and S&P500 needs to break 1407.
For bearish sentiment to continue, Dow needs to break 13,151 point and S&P500 needs to break 1400.53
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| Dow and s&P500 expected to open higher or rally because because of ECB fine tuning operation. |
| Percentage Gainers | |||||||||
| Issue | Symbol | Volume | Last | Chg | % Chg | High | Low | ||
| Supreme Industries | STS | 25,145 | $4.84 | 0.74 | 18.05 | $4.96 | $4.30 | ||
| Aegean Marine Petroleum Network | ANW | 14,550 | 6.78 | 0.57 | 9.18 | 6.80 | 6.23 | ||
| WuXi Pharmatech (Cayman) ADS | WX | 9,578 | 15.83 | 1.11 | 7.54 | 15.85 | 14.80 | ||
| Array BioPharma | ARRY | 39,722 | 4.84 | 0.28 | 6.14 | 5.00 | 4.46 | ||
| Percentage Decliners | |||||||||
| Issue | Symbol | Volume | Last | Chg | % Chg | High | Low | ||
| Envivio | ENVI | 28,497 | $3.20 | -2.50 | -43.86 | $4.23 | $3.19 | ||
| Groupon | GRPN | 10,472,102 | 6.06 | -1.49 | -19.74 | 8.00 | 5.95 | ||
| MarkWest Energy Partners | MWE | 98,194 | 50.45 | -2.30 | -4.36 | 52.78 | 50.38 | ||
| Education Realty Trust | EDR | 13,182 | 10.97 | -0.35 | -3.09 | 11.32 | 10.67 | ||
| Coinstar | CSTR | 42,649 | 47.68 | -1.39 | -2.83 | 49.08 | 47.52 | ||
Economic Calendar
| TIME (ET) | REPORT | PERIOD | ACTUAL | FORECAST | PREVIOUS |
|---|
| 7:30 am | NFIB small business index | July | -- | 91.4 | |
| 8:30 am | Retail sales | July | 0.2% | -0.5% | |
| 8:30 am | Retail sales ex-autos | July | 0.3% | -0.4% | |
| 8:30 am | Producer price index | July | 0.2% | 0.1% | |
| 8:30 am | Core PPI | July | 0.2% | 0.2% | |
| 10 am | Inventories | June | -- | 0.3% |
