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Sunday, July 22, 2012
VIX Has Remained Undervalued For Longer Than Expected.
On Friday, Spain reared its ugly head again and negative headlines are popping up about Greece AGAIN in overnight session. Depending on AAPL earnings results and ongoing developments in Europe, I would not be surprised if SPY tests its support line again (around 134.5 level this time), but this time with higher probability of the support failing due to the fact that SPY and the VIX have priced in potentially positive news and shrugging off actually negative news. Yes, I know this can be considered a bullish sign, but that was the case over a month ago, when expectations were really negative but price action quite positive. That is no longer the case.