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Apr.10
12:37 PM ET

With good news from Walmart [WMT  Loading...      ()   ] and Goldman [GS  Loading...      ()   ]CEO Blankfein saying we are closer to the end of the current financial crisis than the beginning, the markets are rallying. Is Blankfein right or is it the calm before the storm? The S&P Financials are up .7% today and the CBOE Volatility Index [VIX  Loading...      ()   ] is close to its low close for the year of 21.90 set on Feb 26. 

The CBOE Volatility Index, a.k.a. the "Investor Fear Gauge",  measures the market's expectation for 30 day volatility.  A value over 30 indicates high volatility and uncertainty while a value under 20 indicates a more stable market.

It is also the longest stretch since we have had a triple digit move of the Dow [.DJIA  Loading...      ()   ] all year. If the Dow holds onto its gains, this could be the 38th triple digit move of the year and the first in 7 trading sessions.

Avg Historical Dow Performance after VIX crosses below 20 (based on 136 occurances since 1986):

  • 1 week later:  up 0.1%
  • 1 month later: up .73%
  • 3 months later: up 2.05%
  • 6 months later: up 5.29%
  • 1 year later: up 10.49%

Leading the Dow today are Intel [INTC  Loading...      ()   ], Home Depot [HD  Loading...      ()   ],  and Merck [MRK  Loading...      ()   ].

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