It remains to be seen whether yesterday’s new high of 81.17 in the VIX turns out to be the top in that index. Personally, I think there is a good possibility that 81.17 holds up for many years, but I also believe that it is even more likely that the TED spread (which measures the difference between LIBOR rates and the yield on the 3 month U.S. T-Bill) high of last Friday will mark the maximum point of atherosclerosis in the credit markets.
In the graphic below, courtesy of Bloomberg, you can see that the TED spread has already pulled back about 14% from the October 10th high.
Even a slow thaw in the credit markets and in equity volatility should be a sign that the global economy is turning the corner. In fear and panic there is opportunity; and as we turn the corner, the opportunities are greatest.