Volatility Index Signals a Pullback: Strategists

The CBOE Volatility Index (VIX), the mostly widely used gauge of fear in the market, is down almost 20 percent over the last three months. When should investors expect volatility to return? Dan Deming, trader at Stutland Equities, and Dan Cook, senior market analyst at IG Markets, discussed their insights.

Right now, there is some pessimism out there in the back months, there's some volatility buying and protection going on," Deming told CNBC.

Deming said the markets are “very oversold” and sees some “bearish sentiment.”

“We’re working off some of that right now…but above 1,100 [on the S&P], people are looking to protect against further potential volatility.”

Source ..http://www.cnbc.com/id/39171297?__source=yahoo|headline|quote|text|&par=yahoo

Art Cashin: Market Is Overbought — Testing 1125-1135 Again

Stocks opened modestly lower Tuesday despite a gain in retail sales that was better than what forecasters had expected. Stocks then rose, but weakly; so is the market rally over? Art Cashin, director of floor operations at UBS Financial Services, shared his insights.

“There’s some hesitation here,” Cashin told CNBC.

In addition, Cashin said theNFIB small business optimism index is indicating a "tale of two economies—Main Street versus high caps."

“The other thing is, we’re at the very high end of the recent trading range," said Cashin. "Between the beginning of June and now,we’ve tested the [S&P] 1,040 area on the downside three times."

“This looks like the third test of the 1,125 to 1,135 area so the market’s a little bit ahead of itself—it’s been up 9 out of the past 10 days and on most metrics, it’s overbought.”

Source ...http://www.cnbc.com/id/39170207

Basel III 'Irrelevant,' Won't Stop Next Crash: Analyst

The historic banking reforms agreed in Basel over the weekend are pointless and won't stop the next crisis destined to hit the markets, Alpesh Patel, principal at Praefinium Partners, told CNBC Monday.

"In so many ways, it's so irrelevant," Patel said. "Crashes tend not to repeat themselves in the same manor, so we're fighting the last battle."

Banks will now have to increase the amount of low-risk assets they hold in the hope of averting the bailouts seen in the sector after the last financial crisis.

Patel did concede that there needs to be some protection from the circumstances that led to the crisis, but warned that it won't protect against future shocks to the stock market and economy.

"The next crash will not arise out of these reasons regardless of Basel III," he said.

Patel also criticized the longer-than-expected lead time that financial firms are allowed in which to implement the changes.

"The other problem with this is that the regulators have shown quite a degree of leniency time and time again… they don't to make the really tough decisions because they're too afraid of spooking the markets," he said.

Christopher Wheeler, director of equity research from Mediobanca, told CNBC the new Basel III rules struck a balance between the economy and banking regulation.

"If the economies had been stronger, I think we would have seen stronger regulation," Wheeler said.

Source ...http://www.cnbc.com/id/39147155/