In the past two days of trading, the VIX has plunged to 64.70 and is down 20 percent since it’s record high last Thursday. Clearly, The government bailout of Citigroup and President Elect Obama’s announcement of the Chairman of the New York Fed Timothy Geithner to be the next Treasury Secretary has sparked this market rally. Unclear however, is how long all of this will last. The economy still has not healed from bad news in home sales, unemployment, and the bleak situation of financial institutions worldwide. In light of all this, are we starting to climb out of this financial abyss or was this just a bear market rally? Time will most certainly tell.
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