Drew Arnold - Seeking Alpha © seekingalpha.com. Use of this feed is limited to personal, non-commercial use and is governed by Seeking Alpha's Terms of Use (http://seekingalpha.com/page/terms-of-use). Publishing this feed for public or commercial use and/or misrepresentation by a third party is prohibited. SeekingAlpha.com http://seekingalpha.com/author/drew-arnold Watch the VIX for Hints on Market Pullback http://seekingalpha.com/article/147121-watch-the-vix-for-hints-on-market-pullback?source=feed 147121

Chart courtesy of StockCharts.com

On Thursday of last week, the volatility index (VIX) spiked 6.6% in the face of a broad market selloff. This move, however, comes after about two weeks' worth of a decline in the VIX, which occurred even as stocks slid. What does this mean for the stocks in the short term?

During a pullback, it is helpful to know the likelihood of investors buying or selling into the weakness. Since the markets are currently declining down towards key points of support (S&P 890 and 875), investors could either reload at those points or sell off in order to prevent further losses. The VIX suggests which way investors are likely to go.

In this case, if the VIX continues to spike then it is more likely that the S&P will break through its support levels. The higher

]]> Mon, 06 Jul 2009 07:38:06 -0400 Drew Arnold By Drew Arnold:

Chart courtesy of StockCharts.com

On Thursday of last week, the volatility index (VIX) spiked 6.6% in the face of a broad market selloff. This move, however, comes after about two weeks' worth of a decline in the VIX, which occurred even as stocks slid. What does this mean for the stocks in the short term?

During a pullback, it is helpful to know the likelihood of investors buying or selling into the weakness. Since the markets are currently declining down towards key points of support (S&P 890 and 875), investors could either reload at those points or sell off in order to prevent further losses. The VIX suggests which way investors are likely to go.

In this case, if the VIX continues to spike then it is more likely that the S&P will break through its support levels. The higher


Complete Story »]]> VXX VXZ Drew Arnold Will China Drop U.S. Debt? Unlikely http://seekingalpha.com/article/143931-will-china-drop-u-s-debt-unlikely?source=feed 143931 There has been a lot made out of the prospect that China will drop US Treasuries, and even that the rest of the world will follow suit and take on some form of a new global currency. Let's look at it from a behavioral perspective.

China essentially has two choices:

  1. It could continue buying US Treasuries, while running the risk that the debt will continue to fall in value, or
  2. Begin selling off its Treasuries and adopt a new preferred form of reserves.

Which decision makes the most financial sense? That would be option 1. If the second option were implemented, it would result in a massive loss of reserves for the Chinese. Their remaining Treasuries would plummet and they would put themselves in a race with other Treasury-holders to dump them the quickest.

Yet if they choose option 1, don't they still have to deal with the dollar slowly

]]> Thu, 18 Jun 2009 06:05:21 -0400 Drew Arnold By Drew Arnold:

There has been a lot made out of the prospect that China will drop US Treasuries, and even that the rest of the world will follow suit and take on some form of a new global currency. Let's look at it from a behavioral perspective.

China essentially has two choices:

  1. It could continue buying US Treasuries, while running the risk that the debt will continue to fall in value, or
  2. Begin selling off its Treasuries and adopt a new preferred form of reserves.

Which decision makes the most financial sense? That would be option 1. If the second option were implemented, it would result in a massive loss of reserves for the Chinese. Their remaining Treasuries would plummet and they would put themselves in a race with other Treasury-holders to dump them the quickest.

Yet if they choose option 1, don't they still have to deal with the dollar slowly


Complete Story »]]> TLT TBT TIP FXI PGJ CAF GXC Drew Arnold Follow the Piling into Natural Gas http://seekingalpha.com/article/143930-follow-the-piling-into-natural-gas?source=feed 143930 Over the past few days, traders have been piling into natural gas with the hope that it will converge, as it historically has, with the price of oil. Oil has left natural gas in the dust over the past few months, and investors are betting that natural gas will catch up.

However, it's important to remember the source of the recent spike in oil prices. The increase is largely because of inflation expectations. Investors are looking to oil as a hedge against inflation over the next several years, which is why they've piled in. Oil

]]> Thu, 18 Jun 2009 06:01:56 -0400 Drew Arnold By Drew Arnold:

Over the past few days, traders have been piling into natural gas with the hope that it will converge, as it historically has, with the price of oil. Oil has left natural gas in the dust over the past few months, and investors are betting that natural gas will catch up.

However, it's important to remember the source of the recent spike in oil prices. The increase is largely because of inflation expectations. Investors are looking to oil as a hedge against inflation over the next several years, which is why they've piled in. Oil


Complete Story »]]> UNG Drew Arnold