For the second week in a row, we have seen a significant uptick in volatility, yet the VWSI refuses to move from zero.
The VIX ended last week at 16.23, up 0.48 or 3.0% for the week to its highest weekly close in 3 ½ months. Looking back two weeks, the VIX has now risen a cumulative 2.29 points or 16.4%, with the VWSI holding steady at zero at the end of each week.
For what it’s worth, the VIX futures appear to agree with the assessment of the VWSI, as futures from July ’07 to June ’08 are all bunched tightly in the 16.16 to 16.41 range.
(Note that in the above temperature gauge, the "bullish" and "bearish" labels apply to the VIX, not to the broader markets, which are usually negatively correlated with the VIX.)
Wine pairing: For an inexpensive Rhone blend, I continue to recommend: Oakley Five Reds; Robert Hall’s Rhone de Robles and Tablas Creek’s Cote de Tablas Blanc; Wrongo Dongo, the contrarian favorite from Spain; and The Stump Jump (I prefer the white over the red) from Australia. If you are looking for additional ideas, I encourage you check out the Rhone Rangers.