VIX Jumps After Greek Austerity Measures Pass – Stocks Hold Firm:
Volatility rose today one full trading day after Greek austerity measures were passed in Europe. We expected increased trading volatility this week and the .VIX jumped past 20 today rising over 8-1/2 percent. The S&P passed 1350 which is a critical level according to some technicians but it could not hold above there during early trading. The Greek austerity measures have passed but questions remain about the viability of implementation with protests from Greek civilians.
News from Europe is having an effect on the markets short-term with traders losing conviction about holding stocks long term. While the .VIX jumped above 20 today, it is still very far from the 3 month high of about 35 and has been trending downward. An increase in volatility over the next few days could signal an opportunity for buying stocks. The Dow Jones retreated back to Friday’s losses and but made a sharp comeback in the final minutes of trading back above 12,855 with the S&P closing back in on 1,350. There is still no clear evidence the rally is over yet.