The VIX index which is a measure of expected volatility and generally used as a gauge for fear in the market is rising strongly. The VIX is calculated using premiums on a basket of S&P 500 options. Typically the VIX rises when the market falls, today the rise is much stronger relative to the fall in the market. In fact, the VIX started rising even when the market was positive. I think one of the reasons the market has started selling off strongly is due to this action in the VIX as traders are wondering why this is happening and is this a precursor to some bad news(does somebody know something). I don’t know the exact details about the calculation of the VIX but I have observed that it does act strange sometimes near options expiration. At this time I am inclined to believe that this strange action in the VIX is due to options expiration rather than something fundamental.
Ujjval on What’s going on in the T… BP on Unemployment claims improving… BP on Operation Twist Beau Chimene on Jean Claude Trichet as Jack… austextrader on Market View – 5/19