Zeev's Turnips Patch-No Politics (ZEEV)

[Lane Hall-Witt]

veez--

The VIX and VXN are measures of volatility in the options market -- traders use them as signs of the level of "fear" in the market. Generally, the more fear there is, the more inclined a trader should be to buy the market -- because high fear indicates that people have taken money out of the market or have gone short. (The idea is that these are all potential buyers, and one should want to enter the market ahead of these potential buyers.)

By historical standards, VIX over 30 and VXN around 50 are still relatively high, but my point about their rapid unwinding was meant to note that the level of fear has actually dropped very quickly off the recent highs set a few weeks ago. The fear is quickly giving way to complacency.