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VIX Not Yet Peaked

The VIX chart above (courtesy of Doug Kass) shows the relationship between the volatility index and the DJIA.

You can see that in earlier selloffs the VIX peaked substantially higher than it did yesterday. That will give the short-term traders more reason to sell as they will be expecting more downside to this market.

It is hard to tell what the day will bring, but the market opens in a bit and the futures are indicating a slightly down opening. Oil is up again, which will put a downward bias on the market as well.

Not really the way we wanted the quarter to end, but the good news is that all of the gold stocks that we’ve been buying were up 6% to 8% yesterday, so our thesis that gold as an inflation hedge and as a hedge against calamity in the financial markets seems to have been a good one.

More later.