Sentiment indicators -- Market volatility is lower after equity markets recoup mid-day losses

Tuesday, December 18, 2007



Market volatility is lower today as equity mkts climb back into positive territory. The VIX is -2.0 (-8.0%) at 22.6, while the more tech focused VXN is -1.3 (-4.7%) at 26.5. The VIX and VXN initially gapped lower when equity mkts opened higher following reports of a massive injection by the European Central Bank into the banking system and a few better than expected earnings reports—however, the major averages reversed off the open with Finance and Housing pacing the way to the downside. Both the VIX and VXN moved slightly higher mid-day, but returned to their lows as equity mkts rebounded in the afternoon (Dow +99, Naz +28, S&P +13). The CBOE put/call ratio is currently at 0.99, indicating nearly equal put and call trading.

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