While implied volatility in and of itself is not necessarily an indicator for underlying direction, it does give a good clue to what paper is thinking

As many of you know, the VIX got crushed yesterday. While 0.71 may not be seem like a lot. When taken into context of the SPX (down 18), the VIX was off A LOT, probably another 2%.

Large one-day market moves invariably generate excitable media reaction. Such moves tend to occur in times of great uncertainty, however.

Last Friday, with the financial markets waiting in nervous anticipation, the European leaders delivered a carefully crafted message from Brussels that they had reached an historic agreement to draft a new treaty intended to create closer economic integration in an effort to confront the sovereign debt crisis.

A look back at the week in volatility

Seven days — that is how many days it had been since the VIX broke 30.

If you didn't get a chance see Jim Cramer of Mad Money, you can watch it on Mark Sebastian's front page. I am going to expand on what he was talking about and briefly point at another couple of indicators I look at.

Trade selection using volatility as the primary criteria. Different trades for different volatility opportunities.

Last week, in a coordinated effort to lower the dollar funding costs for European banks the US Federal Reserve along with five other central banks lowered the three-month euro swap rate, allowing European banks to pay a lower premium to borrow dollars in the swap market.

There's nothing like a gigantic rally to get the market's juices flowing.

Trade selection using volatility as the primary criteria. Different trades for different volatility opportunities.

Usually when the financial media mentions record events, they refer to new highs or other positive developments. However, last week it was to draw attention to the worst Thanksgiving week on record for equities.