Here’s a decent gauge of the wild sentiment ride the fiscal cliff sent the markets on in recent weeks….
- In the days leading up to the fiscal cliff the VIX started to rally as worries over a deal materialized.
- On the 28th as it looked like we were “going over the cliff” traders were positioning for downside as the VIX surged to 23 from 15 just a few weeks earlier.
- Then the collapse. The VIX plummets back to earth as the markets realize that the fiscal cliff was essentially much ado about nothing….
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