It took 25 trading sessions for the VIX to shed half of the excess baggage it had accumulated by the August 16 intra-day high of 37.50. Thanks to the Fed’s larger than expected rate cut, not only is the VIX looking like a competitor from The Biggest Loser, but Friday also marked the first day since July that the VIX spend the entire day in the teens.
The VIX dropped 5.92 points or 23.8% this week to end the week at 19.00, but consistent with the volatility roller coaster theme, this was only the third largest weekly drop of 2007. The drop was enough to turn the VWSI around, however, pushing that indicator from -1 to +6. The VWSI has only registered an end of week reading of +6 or higher five times since 1998, with four of those five instances seeing a significantly higher VIX over the next few weeks.
I’ll offer up one additional factoid to think about. Consider the current investment climate and consider also that at its present level, the VIX sits a mere 0.07 above its 17+ year lifetime mean. To my thinking at least, the VIX is once again looking like fairly cheap portfolio insurance…
Wine pairing: For a VWSI of +6 I favor a semillon. This often overlooked varietal tag teams with sauvignon blanc to form the white wines of
In the New World, semillon has gained a strong foothold in
It is harder to pick a particular US producer that has built a reputation for semillon, but one to keep an eye on is L'Ecole Nº 41, from the
For more information on semillon, StarChefs.com has a good discussion of the varietal, along with a handful of recommended producers in