How did those VIX numbers work in September?
On September 15th, the VIX exploded about 20% and shot above 30. The SPY closed at 120.09.
On September 17th, the VIX hit new closing highs for 2008. The SPY closed at 116.61
On September 18th, the VIX shot over 42, before The PPT came in with the Bailout and later, the Shorting Ban. Perfectly timed to get the maximum Gamma Whipsaw Effect of expiration day. The SPY went as low as 115 before closing at 120.07.
Yesterday, the VIX took at the highs of September 18th. The SPY closed at 111.38.
At each juncture, it sure looked like we had hit an important, capitulatory moment. And obviously the higher the VIX gets and the lower the market gets, the closer we are to the bottom. This may very well be THE bottom. But just keep in mind this is the 4th obvious Panic bottom in the last 2 weeks. They come on TV every six minutes noting only the last moment, but conveniently forget there was lots of pain associated with chasing the other bottoms.
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