Archived IMT (2010.04.19)

FRIDAY's 14% SPIKE IN THE VIX suggests that Fridays declines in US equity indices might not be a 1-day event. Each of the last +8% spikes in the VIX (Jan 20th and Feb 4th) involved a decline of at least 5% and lasting at least 1 week in US major indices. One UNUSUAL DEVELOPMENT in the recent rally of US equities is that emerging market indices (Brazil's Bovespa and India's Sensex) had fallen by as much as 4% BEFORE the high was reached in US indices. Such rare divergence between emerging market equities and those in the US suggested that S&P500 and Dow are due for a correction of at least 3-5%, which could drag the S&P500 and the Dow towards 1,150 and 10,550 respectively.