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Wednesday, July 29, 2009

VIX and SPX Out of Whack

Something has to give to relieve the pressure or divergence between the two. Either the VIX must drop sharply and the SPX breaks above 980 and heads higher, or the SPX will break down below 965 and matches the amount of fear rise that seems to be occuring.

At the moment it is a tough call. But looking at the VIX chart, I'd say it might drop and fill a gap.

It is P2, so bulls get the slight edge. However I'll sit and watch and let the big boys figure it out.


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