Michael, believe me, the VIX can get much, much lower. And this will commence tomorrow if the employment #'s come in tame. Since they have been keeping statistical records of VIX going back to I believe Dec 1985, the lowest VIX level we got down to was 9.57 in April 1995. If you recall, 1995 was a monster bull year and the VIX stayed flatline pretty much the whole year between 11.5 and 13.5. Even before the crash in 1987 wasn't that low as it hovered around the 16 level in July of '87, and crept up to low 20's in late September and early October. Got in the 30's the week before the crash and hit an intraday high of 173 area the day of the crash on Oct 19, '87.
I would place those odds very slim (say 10% chance) on a double top in the market. For the double top to occur, tomorrow's unemployment #'s would have to come in at something like 4% from 4.3%(highly improbable, but not impossible), and new non-farm job creation would have to be in the neighborhood of 350,000+ vs. consensus estimate of 200,000 new jobs. If this occurs, yes we could have this sharp swift downward jolt. But everything else has come up smelling like a rose.
7.30 Est time bright and early report. We are clear sailing if we get through this #.
Best, J.T. |
