$VIX Spikes to 22.7, $SPX Starts Reacting to Downside (Charts) - Updated
In the past month, the $VIX is up 50% and the S&P 500 is down only 0.95%. The S&P fell 1.10% today on worries that Congress won't pass a bill in time to avert the fiscal cliff (automatic tax hikes and spending cuts). It also broke through the 50 day moving average. The fund that bought 25,000 VIX January $20 calls on December 12 is now in the money it looks like. The House and Senate will probably come up with a deal to lighten the blow on the economy, but it could be forced by market volatility. *Also, Treasury Secretary Tim Geithner told Congress on December 26 "that the statutory debt limit will be reached on December 31, 2012." Finally some fresh implied volatility.