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Volatility to Increase in Coming Months: Trader

Monday, 17 Aug 2009 | 1:59 PM ET

The CBOE Market Volatility Index (VIX), a measure that determines the volatility levels in the S&P 500 index options, soared over 10 percent on Monday. Dan Deming, trader at Stutland Equities, and Brett D’Arcy, CIO of CBIZ Wealth Management shared their outlooks.

Volatility Makes a Comeback
Volatility is creeping back up again, with the CBOE Volatility Index up 16 percent Monday morning. Dan Deming, of Stutland Equities, and Brett D'Arcy, of CBIZ Wealth Management, share their insight.

“We’re seeing that the velocity of this move this morning is elevating the VIX,” Deming told CNBC.

“The VIX is a measure of uncertainty—it’s a forward-looking index—it’s not a historical or realized volatility measure, it’s a forward-looking measure. And right now, we’re expecting more volatility over the next couple of months.”

On the other hand, D’Arcy said he sees a 5 to 10 percent market movement over the next 30 days, based on the VIX levels.

“That’s something we can live with after we’ve come up about 50 percent off the lows,” said D’Arcy.

D’Arcy also said this year has been a year where axioms have not applied.

“If you sold in May and stayed away you would have missed quite a run, and if you look at September in a historical context and think it’s not going to do well, you’re going to miss again," he said. "And that’s about the time people are going to be putting on their investments for the end of the year.”

D’Arcy’s Recommendations:

Underweight: Energy

Overweight: Health Care, Technology

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Disclosure:

No immediate information was available for D’Arcy or Deming.

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CNBC Slideshows:

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CNBC's Companies in the News:

Research in Motion

Lowes

Charles Schwab

JPMorgan Chase

BB&T

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Disclaimer

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