The market has undergone back-to-back days of high volatility – first a decline, then a rally. But the volatility indexes (VIX, the CBOE volatility index) and the one I watch, RVX (Volatility index for the Russell 2000 index options) are significantly lower than they were before these two volatile days occurred:
VIX declined from 49 last Friday to 45 on Tuesday.
RVX declined from 53 to 50.
Uncertainty surrounds us. Will last night's presidential speech to Congress give the market some direction?
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Bear market rallies are often fierce. If the markets head higher Wednesday, we'll all have to decide if we are seeing one of those rallies, or if the bottom has been seen. I'm not planning to guess.
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I'm personally rooting for another day's rally because I'm short some put spreads that I'd like to cover – at good prices.
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Can the government really encourage (ok, force) the banks to lend money? That's what's needed to the economy working again.
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