Volatility: Out for Lunch
The VIXY, VIX is taking a break and along with it the iPath S&P 500 VIX ST Futures ETN (VXX) continues to sink to new lows daily. The question becomes will the VIX and VXX bounce back? Should we be afraid or just ignore the warning and buy up everything?
Great 2 second analysis on the state of the VIX comes from Larry Conners at TradingMarkets.com. Here's what he has to say:
Is The VIX Too Low?
A lot has been written recently about how low the VIX is, how it has to go higher, and therefore the market has to drop. The reality is it’s not true.
If you look at the bull market from 1995-1999, you will see a steady rise in the VIX during that bull market run. Higher long-term VIX levels do not equate to lower stock prices.
Also, as you can see from the statistics below, the VIX has spent over half of its time over the past two decades (from 1992 through Tuesday) between 10-20. So the level it’s at today is very, very normal.
This doesn’t mean the VIX won’t spike from here (it certainly can). What it does mean is that those who are saying the VIX has to rise, or the market has to drop, are simply guessing and not looking at the historical facts.
Bottom line: Enjoy the break in volatility Masters, its time to enjoy the ride.
Best of the Blogs
Scanning and identifying the best blog entries every hour
- Saturday Cinema with Le Fly: Blue Jasmine | iBankCoin.com
- 11 Signs That We Are Entering The Next Phase Of The Global Economic Crisis | ZeroHedge
- What Will Happen To You When The Dollar Collapses? | ZeroHedge
- Summarizing Today's Greek Negotiations In One T-Shirt | ZeroHedge
- Cybersecurity Companies in the "Military-Internet Complex" | Financial Sense
- The Race to Diversify - Too Much Paper, Too Little Gold | Financial Sense
- Baltimore Protests Erupt; Mayor Asks Fans To Stay Inside Ballpark For Own Safety - Live Feed | ZeroHedge
The most relevant financial news and articles from the Internets
- British multi-... | Business Insider
- There’s a ‘Star Wars’ Easter egg in a lot of Marvel movies | Business Insider
- Durable goods orders jump, but a key detail was not good | Business Insider
- Bin Laden allies suspected of Vatican plot arrested in... | Business Insider
- Boris Johnson could be the UK... | Business Insider
- Putting 'unemployed' on your LinkedIn makes you look desperate — here's what... | Business Insider
- Google's core business is slowing down (GOOG) | Business Insider