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Wednesday, October 21, 2009

The Market Fear Factor

VIX is a momentum indicator( click to see detail, as mentioned before in this blog) used to gauge the market sentiment, It can be interpreted in the simplistic way: it measures whether investors are optimistic or pessimistic, higher number indicates pessimistic and lower number indicates optimistic.

Let's take a look at VIX chart,it has dropped from as high as 96.4 to current level at around 20, which is the "normal" level before financial crisis. Charts can speak itself.

(click to enlarge pic)

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