US Markets: I've told you to be weary of the return of volatility. Chart below shows today's sudden- 17% jump in VIX volatility index and the coincident fall-off in the main markets (sorry, crumbling Eircom broadband infrastructure means I can't get my hand on better charts right now):
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhnA4wntuH7LoeciWfY-MiayoLjnktuVxMELKR3QTFTTaxIC0BtiBt96oter9P3GgvdUEhJjitAnV0aGSE6kCvISroo6iYpz-JtU0j_CeUhp1F-s9VqtF9yz2IYn1piVkbP4AKfd_gEnTlh/s280/Picture+4.png)
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjl-nOZXJVaiYswlJKup-Thze7ZS1Q43-MM0S9RNYPhX9mmPsuGmmstJuJUj2E_EqGI7oYu2RDIEaGxQL_Wv1tdUHyZ5VOj9KOLgLs7vtOVksKt-2zbcJD3uSHFPReLMsHBZgcaqvCS70kh/s280/Picture+5.png)
Even more worrisome is the following chart, showing that both near-term VIX and long-term VIX are actually in excess of the current VIX, so markets are now pricing higher volatility for the foreseeable future.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh1THOdNaw5FQz5-nI8JwXXID6T9JRP7-TwJuapp3nTffghRoMNZwVZ8XldCu7UtqEQQYLSQIbN-tb-Ix_U3euYW7zaYkXEszwMjU_lTIxNdYDejN-oxPzFdRWXnYr2wXWBKpsZFdUjDUsJ/s280/Picture+6.png)
Another telling graph above - notice negative correlation of the last few months turning positive about a week ago and back to negative now - this is a likely holding pattern as in 2007 late Summer and 2008 Summer-Fall.
China was the latest trigger today, but it all goes back to trade flow, as China is a barometer of this and trade flows are a barometer of global growth...
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