The VIX hit a high of 22.49 on the opening that eclipsed the 19.47 reading it achieved when the S&P 500 hit the 1245 low on May 24; this represents the highest intraday reading since March 2004.
The equity only put/call reading has also popped to 1.30, its highest level of the last five weeks, but the P/C on index products is still at just 1.98, which is below a level I consider indicative of a bottom or creating a sufficient broad market safety net that would allow institutions to begin buying dips and rebuilding long positions.
I'd like to see the index P/C get above 3.0 and see a successful test of 1245. That means not just laying at 1246-1267 but probing through and then bouncing back and holding above the 1250 level for the balance of the day.
Steven Smith Blog Opening Up and Down 6/8/2006 9:56 AM EDT We may get an official 10% correction.
Steven Smith Blog Bad Finish Amid Oil Spill 6/7/2006 4:24 PM EDT Retailers were strong, but oil stocks took it on the chin.
Steven Smith Blog Holding Higher 6/7/2006 2:40 PM EDT There have been some large index option trades, but those have been hard to read.
Steven Smith writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He was a seatholding member of the Chicago Board of Trade (CBOT) and the Chicago Board Options Exchange (CBOE) from May 1989 to August 1995. During that six-year period, he traded multiple markets for his own personal account and acted as an executing broker for third-party accounts. He appreciates your feedback; click here to send him an email.To read more of Steve Smith's options ideas take a free trial to TheStreet.com Options Alerts.
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