Over the weekend we covered the Volatility Index (Chicago Options: $VIX chart) and how this index has almost doubled in price over the past month due to the ongoing tumult in the world. This metric is best known for investor sentiment as it pertains to fear and market expectations. Seemingly the markets are becoming more confident as the nuclear risks in Japan appear to be abating, hence the VIX chart is now below 20 once again. Over the past four trading days the three leading indexes have all rebounded respectfully with the Dow actually moving above its 50 day moving average. Dow chart, S&P 500 chart, Nasdaq chart.
Equities continue to demonstrate remarkable resiliency despite the geopolitical climate we are in and the unfortunate tragedy in Japan. Having said this, I expect to continue to see markets very volatile as almost everyone is paying close attention to the headlines and outcomes. As investors and especially in times like these, patience and discipline is always one of the best policies.