There has been some rethinking of the meaning for the VIX. Some used it as a forecasting tool. This year, such forecasting has been disappointing. However I like keeping an eye on it to give clues about excitement & fear in the markets.
•VIX Fails to Forecast S&P 500 Drop, Rebound Loses Followers for Volatility
Oil is down, trying to break thru 40 again:
| CLG09.NYM | ..Crude Oil Feb 09 | ...40.95 | ... 1.41 .......(3.3%) |
Toyota (TM), down 3.43, is forecasting its first loss ever. The US market is a leading cause of its problems combined with the large rise in the Japanese ¥. Last week, Honda gave its 3rd negative profit guidance warning this year.
Credit Suisse downgraded GM costing the stock 76¢ today. Their target price was reduced from $2 to $1.
Walgreen (WAG), down 1.56, an S&P 500 Dividend Aristocrat, issued a gloomy earnings report, something which has become common this year. Profits were down in Q1 (just completed) & they will slow store expansion because of the US recession. Same store sales were reported to be flat. While they're going thru a bumpy period, like almost every company, they have an excellent track record raising the div. Their low payout ratio suggests they will raise the div next year & remain in the premier S&P group. The stock price is near its yearly & decade lows suggesting this is a company investors would be interested in for long term gains.
Walgreen Co. --- 10 years
As long as there are no major news events, the rest of the year should be fairly quiet & the VIX may recede further. This is an excellent time to plan for buying oversold stocks selling at bargain prices.
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