"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Thursday, August 30, 2012

Volatility on the Rise

It is interesting to note the price action of the CBOE Volatility Index or VIX of late. The S&P 500 appears to be struggling to break through the 1420 - 1425 region. That combined with growing concern that tomorrow's Bernanke comments are not going to be sufficiently "QE bullish" is fueling nervousness among traders who are fearful of being caught in any downdraft resulting from disappointment among the "punch bowl" crowd.

This same concern is also providing selling pressure in the metals with gold bears capping at the $1680 level while nervous longs exit the market. Dip buying however is coming into the metals from traders who suspect that the ECB is getting its act together on its bond buying program.

The result is that both metals have faded from chart resistance levels but are not breaking down technically.

You can see the VIX Chart below:


  1. Looks like a big double bottom to me Dan. I know Ben is likely to swipe the punch bowl tomorrow. Where is America today?
    Munis in big trouble. No growth, Barbasol shave cream sold in dollar stores used to be 13.8 oz, now 7 oz,INFLATION, employment numbers that are criminal, medicare and SS assaulted, derivative debt amongst the larger banks 100x's their current asset values, principal theft of peoples money, lying politicians, and we wait. We wait and if he takes the punch bowl, all assets sell off! Middle American companies are all crushed, balance sheets destroyed. Help us Lord. God give us strength to drain the swamp. Please someone, anyone, start putting people in jail who really should be seeing the firng squad. JPM should be paying back their collateral to Americans, or, they can never, ever get a license in the US. Corzine your time of getting a suntan is nearly over.

    I can no longer trade this chirade. I am staying put with 30% staying in miners. Heck with them all. Finally making a move to remove my IRA from a trading boutique to a physically backed form. (By the way Dan, Jim did not want you to know he saved some sheep from the slaughterhouse.) Dan, thank you for what you do. You do not have to be so kind, and you put up with an awful lot. Have a wonderful evening everyone. Tomorrow is certain to very volatile.

  2. Wow, the "A-Hole from J-Hole" has spoken, and he's successfully been able to get both stocks and bonds moving upwards at the same time.

    Gold is getting dragged up kicking and screaming also.

    I presume that crude might reach $100 and gold could get to $1,750, then he'll have to open up his "Pie Hole" and start yammering about "managing inflation expectations", yada, yada, yada....


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