VIX Off 2008 New Lows

May 8, 2008: 11:31 AM CST

The $VIX (Volatility Index) is bouncing off new lows for 2008 in a sign that traders and funds have become less fearful in the current market environment.

Perhaps they are unwinding their hedges or engaging in some sort of risk-seeking or ‘cooling off’ period, but it is interesting to note that it took the VIX 6 months to make a new low in 2008.

The VIX actually tested a low made near Christmas of 2007 and could be finding support at that level as the main US Stock Market indexes find resistance on their daily charts.

There is a tight range for the indexes, as they are generally beneath their falling 200 day moving average and above their 20 and 50 day moving averages.

Conversely, the VIX is beneath all key moving averages and is in a confirmed daily downtrend while the S&P has been in a short-term uptrend since mid-March.

If you’re not familiar with how to analyze the VIX, or why it’s inverse the S&P 500, check out Bill Luby’s post at the aptly named VIX and More site entitled “Ten Things to Know about the VIX”.

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