Thursday, May 6, 2010

Sea of Red

Thursday's market has opened to the downside, but not (yet) as red as it could've been. Nothing great has changed in the global economy's hot spots.

• Greek votes on austerity (love that word ... not) measures today. Likely to pass. Riots also likely to gain.
• No advance (yet) on cleanup of the Gulf oil spills.
• China has little choice but to slow its economy.

On the other hand, Goldman Sachs has stayed out of the news lately. It all adds up to a lot of media coverage and renewed action in the VXX, which was out of mind for a lot of folks like me who care more about AAPL or IMAX than levels of volatility in the market.

There could be a way to measure media coverage and public reaction, and thus, the rate of volatility before it reaches the nerve endings of the VXX. Let's say CNBC airs the same, exact footage of dudes in Athens being pummeled by cops or the military multiple times per hour. Say the deaths of those three people in a Greek bank fire is reported an average of 5.6 times per hour during premarket. Can an equation be measured that translates into VXX trading activity?

I suppose the ultimate measure is the VXX itself. It's probably a barometer of global investor tension and anxiety. It is, perhaps, the Worry Index.

Looks like there's less stress this morning. After running from yesterday's close of 23.33 to a high of 24.15 today, VXX is now 23.50 (+0.16, +0.74%) and falling.

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