The pressure in the equity markets has taken a breather as the Chinese indices stopped their plummet for the moment, sending some mixed signals through the commodity world. One would assume that an across-the-board correction would be in the offing, but we haven’t seen that response as of yet in the energy and agriculture markets.
On Friday, the VIX closed the bullish window dating from early-December, paving the way for new gains in the S&P Index. Elimination of support in the VIX at 12.08 leaves some accounts over-hedged for the prospect for a back up in the S&P 500. This should lead to some more aggressive equity buying today and later this week.
President of the European Central Bank Mario Draghi says "buckle up" because volatility is back! Keep your hands and feet in the car because it is going to be a ride that may make the "Taper Tantrum" look tame.