Sunday, October 5, 2008

Extreme volatility and rescue plan approval.

Rescue bail out plan has been approved on Friday in US and during the weekend Germany, UK, France and Italy has agreed together to support financial institution. Today Chancellor Angela Merkel confirmed support for troubled Hypo Real Estate bank (HREHF) after the EUR 35 bln rescue plan has been withdrawn.

CBOE Volatility index VIX, fear index, has stayed above 40 during the whole last week. On Monday topped to 48.4. Level of 40 is indicating broadly oversold market and is often associated with the bottom. I already posted historical chart with VIX trend with marks for its bottom. Now we are close to the level of 50 which has not been crossed more than two decades.

At the left sidebar I've prepared poll to see what is you opinion about US rescue plan. Will 700 bln bail out plan help to recover financial system? Right now results are 50-50.


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