Fear-Gauge Flashes Wild Week on Wall Street, State of Europe’s Banks Could Send New Jolts

Saturday, October 18, 2014
By Paul Martin

Investmentwatchblog.com
October 18th, 2014

Fear-Gauge Flashes Wild Week on Wall Street…

NEW YORK (AP) — Europe’s economy sputters, oil prices plunge and stocks start swinging wildly. Wall Street’s long dormant “fear index” now predicts more turbulence ahead.

The Chicago Board Options Exchange’s volatility index, known as the VIX, doubled over the past month: from 12 to 26. Although that’s nowhere near the 80 reached in the financial crisis, the recent spike means traders are bracing for more big jumps and steep drops.

Slowing growth in Europe and the developing world has stirred up lingering doubts among investors just as the Federal Reserve plans to wind down a bond-buying program that many considered a driving force behind the stock market’s five-year run.

Traders have knocked the Standard & Poor’s 500 index down 4 percent this month and retreated into their old hiding spots, U.S. and German government bonds.

All of a sudden, Wall Street’s fear gauge looks relevant again.

The Rest…HERE

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