December 19, 2011
Good morning. The market posted a pre-holiday loss last week, with the SPY down 4.46 (3.5%) to close at 121.59. The VIX, however, was down 7.9% to close at 24.29, reflecting investor anticipation of markets entering a more holiday (meaning quieter and less volatile) period leading to the New Year. That would normally be the expectation, but the last few years have been anything but “normal” so if the premium levels decrease too much it might be worth putting on a position that would benefit from some unexpected movement.