More On Volatility Index

So you don't think volatility is spiking? A look at the chart above shows that since the lows in May, the volatility index (VIX) is up 100%. That's huge. Equivalent to the post- 9/11 period, or LTCM in 1998. It's another sign that fear is spiking.

I suspect that lots of hedge funds that sell volatility (short options) have had their heads handed to them of late, and are exacerbating things in the market. As someone who has been on the wrong side of a naked option before, I can tell you that it is no picnic. But it should allow for a nice snapback after the pain has peaked. Maybe this will coincide with this week's options expiration.