The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (

TheStreet

) -- The

VIX

I:VIX

volatility index soared Thursday, as asset prices for all products with the exception of U.S. Treasuries were hammered. Crude oil prices fell below $80 dollars a barrel, while gold and silver saw enormous slides. U.S. equity prices were down more than 3%, on the back of Wednesday's powerful selloff.

The selloff is on the heels of the

FOMC

downgrading their outlook of the U.S. economy after Wednesday's meeting. Despite adding additional liquidity in the form of the "twist," markets were not impressed and instead focused on global growth. The downgrade by the

Fed

of inflation expectations hit gold and silver prices which collapsed. Silver

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dropped more than 10% while gold was down nearly $60 dollar per ounce.

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The FOMC announced "Operation Twist" in which the Federal Reserve will sell $400 billion worth of three-year Treasuries and purchase the same amount of six- to 30-year U.S. Treasuries. The amount of twisting is slightly more than market participants expected -- 29% of the bonds purchased will be 20- to 30-year tenors in an effort to drive down the longer end of the Treasury curve. There are several significant similarities between Operation Twist and the Fed's QE programs and one key distinction.

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In Wednesday trading yields on 10-year Treasury notes fell to 1.77%, their lowest level on record going back to 1977, which was one effect the Fed was hoping to have. The Fed's move to keep more of its portfolio in mortgage bonds should also pull mortgage rates down as well.

In the U.S., initial jobless claims dropped by 9,000 to 423,000 during the week ended Sept. 17, according to the Labor Department. Claims filed in the previous week were revised to 432,000 from an originally reported 428,000. Economists had forecast claims would decline by 8,000 the week. The four-week moving average of new claims, rose by 500 to 421,000.

Additionally, the preliminary

HSBC China Manufacturing Purchasing Managers Index

fell to 49.4 in September from a final reading of 49.9 in August, according to HSBC Holdings PLC. The fall in the PMI could reignite some concerns over a sharp economic slowdown in China, due to weakening global demand for Chinese goods and various tightening measures at home. The positive news from this data is that the People's Bank of China could potentially begin to loosen policy driving up commodities and equities.

Top Gun Options

trading team is monitoring the VIX volatility index, higher by nearly 14% and testing levels seen in August. The 48% level has historically been resilient, and has only been breached during the financial crises. The 31% level has been strong support during the past 2 months. A break above 48% would likely see a test of volatility toward 60%.

After the bell,

Hewlett-Packard

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officially named Meg Whitman as CEO and president, effective immediately.

Firing Line

: It's days like this that discipline and risk management result in superior execution. Our Intermediate Model Portfolio is up 7% in the last 2 trading days. This shows that being hedged in a market that swings violently is the only way to go. Check out our live trading services today.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.