by David Kranzler
Investment Research Dynamics
All morning Fox Business has had a green banner posted that exclaims, “stocks stabilize.” So down 5% in two days followed by a 2.7% bounce in a little more than 1 day of trading is defined as “stabilizing?”
How about the fact that the S&P 500 was down 3.7% on Monday yet the VIX was down 8%?The only way the VIX can drop like that when the stock market is falling off a cliff is if the Fed is shorting VIX futures in large quantities. This theory is confirmed by the fact that the VIX futures shot back up after the NYSE closed on Monday, which can only be explained by after-hours short-covering. Let’s have a look at the trading log at the NY Fed to see what it was doing on Monday…