SLOOOOOW Summer Days Are Here!

Friday, August 14, 2009

The Dow Jones has traded in less than a 250-point range for the month of August thus far. With the July earnings season coming to a close, traders take their vacations and the market slows dramatically every year. The market is up just over 150 points (1.6%) for the first 10 trading days of August with the Dow closing the week at 9,321.
Volatility has dramatically fallen with the VIX closing the week at 24.27%. Readings above 30 indicate heightened fear while readings below 20 are typically interpreted as representing a prevailing calm among market participants. Currently the market sits in the middle, seemingly tranquil but closely watching the horizon. Today's reading contrasts starkly with the all-time highs seen in October of last year when the VIX hit 89.53%.


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