It has been six weeks since the VWSI closed at an even zero – the point at which theoretically I should have no opinion about the direction of the VIX over the next week or two. Coming off a week where the VIX traded up 12.8% to 23.38, I am hard pressed to pick the next direction for the VIX, particularly since it has ranged all the way from 15.36 to 37.50 during those turbulent six weeks.
So while ‘quiet’ on the volatility front is a relative thing, it does seem as if a 30-something VIX gets farther and farther away with each passing week, particularly given the lack of gory headlines involving i-banks, banks, and hedge funds. Unless the next installment of fear arrives quickly, it will almost certainly lack the visceral punch and bloodletting potential that similar news would have had a week or two ago.
Bottom line: don’t be surprised if we see the VIX in the teens in another week or two.
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.