VIX Ahoy 2

Did I mention the VIX was high yesterday?

I meant that it seemed to be getting a bit heated.

Today the VIX is high.

Tomorrow? You tell me.

VIX Ahoy

So, we didn't have any type of bounce off the AUDJPY recovery support trend line. If you were watching the DOW or the NIKKEI you knew what was happening.

At the same time we have a new high water mark in the VIX. Look at that thing. I mean, seriously?

The only thing I can really point to that may be encouraging is that these higher VIX levels don't seem to be equating to lower lows in the currency markets. Well, let me be cautious, not yet anyway.

Strap on your life preserver and wade on in. You might just catch a wave going in your direction... just know when to get off of it!

Panic In The Streets

Okay, I'm not going to offer any groundbreaking news, we all know what happened to the so-called TARP program.

After the House refused to pass the bill in a bi-partisan manner we saw market participants run for the hills to the tune of a 777 point drop on the DOW. It was quite the day.

Did I forget to mention that the VIX closed at a new high? I even think I saw pieces of the sky fall!

After all of this, I've been watching the carry trades decline precipitously as money was shunted back into Yen as a protective measure.

I don't know about you, but when I see so much hysteria and panic I'm motivated to look for a place to stick my toe into the market. Sure, wait until there are some technical signs to back the decision, but with a tight stop you don't have to put anything significant at risk.

In short, at least with respect to the Forex markets, you control how much risk you are willing to take explicitly. Don't be afraid to look hard at the situation and see if you can find a good risk vs reward ratio. Panic is a sign that it's time to pay attention.

Could the market fall another 700 points? Sure. Could it recover due to some type of new emergency plan? Sure. There's always a winning trade in the Forex markets. Figure out what it is. Find a way to gain entry without much risk. Sit back and see if things change, continue or go sideways.