Volatility has returned to the marketplace. VIX was up 26% yesterday. It looks like a small blip on the graph, but it's very real.
If it turns out that 'the market' believes those 'good' GDP numbers were as false as they appear to be, then who knows how low the market can go? Not me.
On the other hand, I don't think the bulls have been completely defeated (yet).
It was just a couple of days ago when some were speculating that VIX would tumble into the teens. Now it's over 30.
As Bill Luby points out in his excellent VIXandMore blog, when the VIX spiked 26% yesterday (Friday, Oct 30, 2009),
"For the record, the VIX only spiked more than 26% on two days during the financial crisis: September 29 and October 22, 2008."
I'm hoping we are not going to see those frequent daily moves of >500 points in the DJIA.