my subjective sense relative to the participation of american retail investors, it seems vix would be on par with past extreme levels, even though the absolute number is lower then those extreme numbers in the past. levels of speculation by the average retail investor, seems very low from a subjective sense by me.
If you look at the actions wouldn't you say that the retail trader is actually not fearful enough? They seem to brush off all bad news quickly and just buy buy buy...
I don't think retail trader is participating as much, its mostly institutions and naive money or prepubescent hedge fund managers throwing their clients money away.
1472 I believe was the tic high after discount rate cut, it should test that level and look to move higher. this seems like the last party on the Titanic before it hit the iceberg. lot of the macro funds who registered 100% gains or 35% gains shorting subprime, will be looking at these levels in futures, at some point they will step in.
imagine the psychology of those hedge fund managers who were shorting subprime while most of the market was ignoring it. I'm sure a drawdown of sorts was probably evident before it blew up. I saw Melchers interview, and a lot of them feal things for the american consumer will get progressively worse as time passes.
BOJ annoucement usually comes in after midnight est USA time. yen moving around ..pushing around ES with it.
stops will be run from now till BOJ announcment, stops to the downside. from BOJ announcement to European opening, prices should find support.