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Volatility index slides to more than two-month lows

In my opinion once the VIX drops into the 20 range the market will fall because the money will have dried up... But here is the marketwatch opinion anyway:

http://www.marketwatch.com/news/story/story.aspx?guid={7B0D2FEA-6CBA-4B51-BD97-F110843BA9EF}&siteid=rss


NEW YORK (MarketWatch) -- The burst of cheer in the financial sector that has stocks rallying to a fifth consecutive week of gains also has the CBOE Volatility Index, or VIX, poised for its lowest close since late September, just ahead of Wall Street's meltdown.

VIX 37.09, -1.76, -4.5%) on Thursday fell to an intraday low of 36.96, its lowest intraday level since Jan. 28, and putting it on track for its lowest close since Sept. 26, 2008, when the volatility index closed at 34.72.

Foreshadowing its slide, the VIX, which usually moves in the opposite direction of the S&P 500, on Tuesday shifted gears, falling along with the broad stock market gauge in what analysts said often preceded a change in direction for stocks.
"The market's main gauge of risk, the VIX, broke down a couple of days ago suggesting that the brutal market downdraft we suffered in the fourth quarter of last year was simply a one-time massive margin call and not an economic omen," said Jack Ablin, chief investment officer, Harris Private Bank.
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"While there are certainly economic challenges ahead, I view the steady decline in implied market volatility a positive signal," Ablin said. The volatility index ran to a record high of 89.53 on Oct. 24, trading above the 80% level for a total of four trading sessions amid "concerns about failures, nationalizations, (and) bailouts," said Scott Fullman, director of derivative investment strategy, WJB Capital Group Inc.
On Wall Street Thursday, a surprising projection of $3 billion in first-quarter profits by Wells Fargo & Co. (WFC:
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WFC 18.33, +3.44, +23.1%) helped sparked a rally among shares of large banks as well as the broad stock market, with all three major indexes heading to weekly gains. Read more about Wells Fargo.