Short post today.
The media paid a lot of attention to several things yesterday. The huge move up in the fear gauge, aka the VIX. Dollar up means stocks down. 1042 is a very important number for the S&P 500.
All of these things are very very important. Unless they're not.
The VIX' importance ebbs and flows. Sometimes it is important but sometimes not. It is not clear to me that the best application of VIX is as a coincident indicator IE VIX up a lot today so stocks are down.
For now there does seem to be something to dollar up stocks down. If concerns about the greenback come to fruition (perhaps it makes more sense to say play out further) then this relationship should be expected to change. The bigger picture I have been working with has been the US as a less attractive investment destination than other countries. If this turns out to be correct then the dollar will go down slowly and stocks will go up most of the time (but less than many other markets). The point here is that dollar up stocks down will likely change soon.
If you think of yourself as an investor, as opposed to a trader, then 1042 means nothing. Whether the market goes up or down from here investors should take solace the the US capital markets are not permanently broken. At current levels the SPX is about 400 points from the low and 500 points from the high so sort of in the middle. In that context, if you believe that the US markets will function, does it matter if the next 100 SPX points are up or down?
