This obviously supports the thinking that today’s moves are out of proportion to the fundamental events that are driving them and should serve as a reminder that the current environment is in no way as dire as some of the past crises that have caused the VIX to spike 20%. In fact, the magnitude of today’s move may be as much a result of the coiled spring effect (number of days without a 2% correction, etc.) or the volume of the recent bear drumbeat as any fundamental changes in the Chinese economy, geopolitical issues, US durable goods and the like.
Tuesday, February 27, 2007
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