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Turning Points



When I saw the 12 handle print in the VXO yesterday, I could only recall Todd's recent wager: "we'll see 20 before we see 10." Although I agree, we may need to get clarification. Hey Todd, is that a 10 'handle' or 10 even? In all seriousness, we should be alert for some sort of catalyst that generates an uptick in volatility. Longer term I agree with Brian. When it comes, it will come from "left field." But in the short-term, shifts in psychology could come from today's Fall Equinox and / or yesterday's FOMC meeting.

For the equinox, I wanted to look at periods where the SP had performed well into the date and see what happened afterward. The results were decidedly bearish for the remainder of the week. The bias reverts to Hoofy when I looked out ten days (I guess that makes sense with quarter end on the horizon).

Finally, the chart below highlights the most recent FOMC meetings. In retrospect, the last two meetings proved short-term turning points in the market. Remember past performance does not indicate future results. Good Luck!

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