VIX jumped 26.11% on Friday.......

VIX is closely watched to gauge sentiment of market participants......

VIX jumped from 14 area to 24.39 in few days....Friday VIX jumped 26.11% ...

SO why VIX jumped 26.11% in one trading day.....

What was the catalyst for such a sharp jump.....

Most logical answer seems to be that Oil has crashed to $35.62, lowest level in almost 7 years, 

OPEC is least worried about this total crash in oil prices, it is important to understand why they are not worried or supporting oil prices.....

Most popular theory is, that OPEC is trying to eliminate competition from Shale production, once those producers are eliminated with low low prices, then they will hike their prices to wherever they want it to be.

SO ..oil pricing is a deliberate strategy which is being ignored by many know it all analysts.

Why world markets are slumping again...that is the question, which needs to be analysed...

It is all about uncertainty from Fed, until Wednesday 2 PM statement, nobody knows what Fed is thinking.....this "not knowing about direction of interest rates" is taking a toll on investors confidence..

Market is also trying to discount impact of interest rate hike......

Market hates uncertainty, thus a steep fall on Friday....

In last 7 trading days here is the impact of uncertainty on markets :

Dow down 3.62%

S&P 500 down 4.37%

Nasdaq down 4.70%

As you can see that the above number is a normal pullback on Fed upcoming decision......

There is " over analysis " done by many because they are reading too much into small pullback...

I do not see anything " unusual or different " about current pullback.....

I personally believe that TAPE on Monday will stabilise and should close green after margin call selling is out of the way.

When RSI is in 30 area like it is in S&P 500 @ 37.96 & Nasdaq @ 39.59, it is a "deeply oversold situation "

It is NOT about being right about market, it is all about 
 " buying stocks near low of the trading range "

SO..keep your focus on buying bargain stocks and not worry about market, which none of us can predict ever.

Good luck with your own strategy & comfort level.

BLOG does NOT give buy or sell.

Saleem

Posted in: Mixed