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VIX Falls as Sentiment Turns on Wall St

TVIX, a measure of stock market volatility, fell 5% percent to 33. The VIX traded as high as 48 Aug. 8 after staying below 20 for much of the year.

VIX is the ticker symbol for the Chicago Board Options Exchange Market Volatility Index, a popular measure of the implied volatility of S&P 500 index options. Often referred to as the fear index or the fear gauge, it represents one measure of the market’s expectation of stock market volatility over the next 30 day period. The VIX is quoted in percentage points and translates, roughly, to the expected movement in the S&P 500 index over the next 30-day period, which is then annualized. The VIX Index was introduced by Prof. Robert Whaley in 1993 while he was at Duke University. Prof. Whaley is now on faculty at Vanderbilt University.

Bank of America Corp. rose 8 percent, the most of any stock in the Dow average, after analysts said a four-day slide that erased 15 percent of the bank’s value had been overdone.

The Commerce Department reported that companies placed more orders for aircraft, automobiles and other durable goods in July. Orders for longer-lasting goods rose 4 percent, the biggest increase since March. They had dropped 1.3 percent in June. The report eased fears that the U.S. was headed for another recession.

Stock indexes jumped sharply Tuesday, as investors brushed off a pair of weak economic reports and an earthquake that shook the East Coast. Even after Tuesday’s rally the Dow is down 8 percent in August. The S&P 500 index has lost 11 percent, putting it on track for its worst August since 1998.

Wild swings have become commonplace this month after Europe’s debt crisis flared up again and as signs emerged that the U.S. might slip back into recession. The Dow has swung by more than 300 points seven days in August.

 

 

 

 

Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services

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