And It’s Friday Already

• Posted by Adam Warner
• on March 19th, 2010

I think all pundits would agree, there’s a VIX out there that we can all agree on

Just to clarify, none of this is to diss the VIX, even from Birinyi as best I can interpret it. He’s taking a narrow read of it, in response really to the narrow reads you hear on TV all the time. I remember hearing the Power Lunch gang once get excited when the VIX broke below 20. Why? Because they had some stat that when the VIX goes below 20, the market goes higher. That’s like the definition of coincidental indicator. The VIX isn’t “predicting” anything. The market’s not going up *because* the VIX is going lower, a better interpretation is that the VIX has gone lower because the market itself is strong.

Careful charting this pup too finely too. Just read some guy looking for a close above 17.40, or 17.70, to signal some sort of trend change. Well, all things being equal, it’s entirely possible it opens 18ish on Monday. That’s just a statistical quirk as traders today will lower bids ahead of weekend decay.

But we’ll leave on that cliffhanger. Enjoy your brackets.

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