According to the Commerce Department the economy expanded at a 5.9% annual rate in the 4th quarter, we will see another revision in March. While it should show an improvement and came in at the higher range of expectations between 4.2 to 6.3% (mean of 5.7 - right in line with the government) there is still some growth problems going forward.
                The problem with the growth number is that it is not coming from the consumer side, which is traditionally over 70% of economic growth. Inventories added 3.88% to the GDP, more than previously reported. Consumer spending rose at 1.7%, compared to the 2% forecasted and 2.8% gain in the prior quarter. Household purchases dropped .6% last year. The 3rd quarter last year did see a boost - but that came from government stimulus and was lead by auto-sales with the "cash for clunkers". Overall - the economy for 2009 shrank by 2.4%, the worst single-year since 1946.
                2010 is projected to be a lost year - not much of a gain, but also not much of further losses. Unemployment is expected to stay at about 9.5% and consumer spending is looking flat over-all.
 
                This means that investors are really going to have to focus individual stocks that are focused on growth in emerging markets as the U.S. sees a stagnant return in 2010. That means even sectors will be difficult to forecast - except with very broad forecasting.  Recession stocks still seem the safer play, but also be careful on the domestic retail front - even with discount stores - as they could face stagnant consumer growth (top line revenue).
 
                Futures in the pre-market remain flat.
 
http://www.bloomberg.com/apps/news?pid=20601087&sid=aCNj5A7dd5hY&pos=2

                If we looked at the intra-day action of the market, we would all agree that the S&P volatility is not 20% (which is where the VIX is priced). The action like yesterday was closer to 31% VIX. The VIX is certainly  - in my mind - low relative to the action we have been seeing in the narrower based indices. Same is true for the VXN. A back-spreader (one who has long gamma and trades volatility - via deltas) had a huge day yesterday. Some would argue that the VIX is fairly accurate at its current value - looking at a open/close evaluation (thus ignoring intra-day action). While that may be true - the majority of trades (both investors and traders) are not on the opening and closing price, but take place somewhere during the day. That means investors and traders alike are more affected by the intra-day volatility, rather than the open/close volatility. I guess if you did nothing as a long or short position holder - than sure 20% is fairly accurate, let's just hope that don't watch the market intra-day because they would suffer a little anxiety.
               

The volume is also light - that is a combination of snow storms, investors still sidelined on what they should do, and the massive loss of investor wealth over the last couple of years. That means that "hidden volatility" is ramping and could show-up at any time (like yesterday).
 
 
                To get an idea of where "real" volatility is - I think a better estimate would be to take the OTM puts (a ban of strikes) and weight them. As I am eye balling it I would say that it is closer to 26% for S&P actual volatility (yes - including intraday). So if you want to be a little conservative and while the VIX may not see an increase in value - I would use the OTM put (ban of strike) determine actual S&P volatility (standard deviation) - whether daily or for the week.