A lot of movement last week in the markets but we still ended up where we started. Market is still highly volatile with movement over 1% on most days. The bounce over Wednesday and Thursday was enough to pull us out oversold territory and get us back over our support zones. It appears we are in the process of another “V” recovery. “V” recoveries have become the standard for market moves recently where we saw 5 of them in 2014. Each time we’ve had a sharp sell off it was followed by a quick run to the highs. Will this happen again? We will have to wait and see but there doesn’t seem to be much downward pressure.
Volatility did not move with the market on Friday. The sell off plus weekend decay should put the VIX up 6-7%, not the 3.17% we actually saw. The VIX is still pricing in 1% daily moves which is why we are still priced in the 17s.