We won’t bother telling you the news today that caused the market tank before the open. The brokerage failure of Lehman and the buyout of Merrill Lynch causing Bank of America stock to drop says it all. But there are actually a few good developments which may not last. The first and easiest thing to note would be the substantial drop in oil prices of more than $5.00 to make $96.00 within striking distance since Hurricane Ike’s actual toll on the oil and gas infrastructure was far less than was expected. But there was a key event right after the open for you technicians. The CBOE Volatility Index, the beloved VIX, went north of 30.00 again.
This level has triggered or coincided with enough market ralliesdespite what the news is that when traders see that 30.00 or higherthey start hitting the BUY buttons. Sometimes they are early andsometimes it still gets worse, but that is the level traders look for.The VIX went as high as 30.96 after the open. The S&P 500 Indexwas down over 40 points at one time and the intra-day low is$1,212.69. The S&P is now at 1,228.75 after almost 90 minutes oftrading.
Again, these levels are technical and can often be short-term ineffect. They rarely are the actual "all clear" bell for verylong-term. But even a bear market rally can be a sharp one.
Jon C. Ogg
September 15, 2008
Top Gaining Stocks
Top Losing Stocks