The market did what it’s done for the last four trading sessions – open near the low of the day and try to claw it’s way back all afternoon.
With the SPX down almost 35 points to ~1261 at the opening, the VIX spiked higher by 22% to 25.72 before retreating. With an hour left in the trading session the VIX was at 23.78, up 2.65 for the day and the SPX cut it’s losses in half.
One pundit on TV mid-day said the market is "oversold". Oversold is a nice term, but to most traders it doesn’t mean much. The oversold condition could continue for a few more days or if the problems in Japan get under control there could be a market bounce. VIX at these levels suggest the SPX should be expected to remain in a 35 point range tomorrow – Higher OR Lower.
Dr. Kearney’s Option Clinic is now closed.