VIX plummets – FOMC Wednesday – May Day Thursday – Oh My!
Generally, I am against being negative on the market. After all, the best days come at the oddest times. However, this week may be an exception.
First, the VIX (the CBOE’s volatility index) has spent most of the year in the high twenties and was over thirty in early March. Today, the VIX dropped below 20. This is less volatility than we have had since last summer.
Second, the FOMC is meeting, this week, and will make a rate announcement on Wednesday at 1:15PM CST. Absent some sort of market news or event, all day Tuesday and Wednesday until the announcement should be quiet. However, after the announcement on Wednesday should be good for trading, if only for less than an hour and a half.
Third, Thursday is May 1st, May Day, and for readers familiar with European Holidays, it will be obvious that this spring holiday in Europe will mean reduced trade in the US markets. Here in the United States, we sometimes lose track of the fact that the world does not celebrate exactly the same holidays as we do.
As for May Day, there is an odd, abstract statue outside the International Studies Building at the University of Chicago that casts the shadow of a highly-stylized hammer and sickle to its right on May Day at noon. My daughter and I were among a group of about twenty people on May first some years ago who witnessed the shadow. I have to admit that it took some imagination, but, to me, it was a hammer and sickle.
So, there you are. Don’t trade on May 1st, but come to Chicago and ride a bike down the lakefront to the University of Chicago at noon and be among the few who will ooh and ahh at what might be a hammer and sickle. Granted, it is cheap entertainment, but it will be time better spent than trading on Thursday.
Wishing you success in your trading, Jeff
Copyright © 2008 Jeff Quinto, all rights reserved