Text Size 
Doesn’t anybody care any more? No, I’m not talking about the holiday spirit. With the S&P 500 down 20 points at the time of this writing, what’s the VIX doing? The CBOE’s volatility index is down .50. If you thought that the VIX was supposed to go up when the market was down, think again. If hedgers and speculators aren’t buying SPX options and pushing their values higher, the VIX doesn’t go up. So, if the market is down and no one is buying those out of the money index puts, does that mean traders don’t care about bad news any more?
Walgreens (WAG) released disappointing earnings. Toyota (TM) forecasts its first-ever annual operating loss. Japan warned that its recession is going to get worse. I don’t know if option traders think we’re going to rally. But when the market sells off and the VIX goes down, you have to think that any drop less than 10% in a day just doesn’t get people exited any more. There’s a lot of red on the board today, and the S&P 500 has given back the modest gains it made last week. By the looks of it, we’ll be staggering toward the end of 2008, happy to get the year over with.
'A couple stocks that bucked today’s trends were contest favorite AIG, up 4% on news that it's close to selling its equipment insurance subsidiary, and PALM, up 20% on news that Elevation Partners LP will spend $100 million to increase its stake in the company. Well, at least someone is having a merry Xmas.
Tom Preston
thinkorswim, Inc.
Member FINRA/SIPC/NFA
thinkorswim, Inc. and its registered employee, Tom Preston, do not solicit or recommend any form of trading in the individual stocks (or their derivatives) mentioned above. Please do careful, independent research before investing any money as well as weigh the possible consequences on your particular financial situation before doing so. The risk of loss may be substantial.
