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
- Spot The Total Logic Fail | ZeroHedge
- Spicy Red Combo | iBankCoin.com
- Another Conspiracy Theory Becomes Fact: The Fed's "Stealth Bailout" Of Foreign Banks Goes Mainstream | ZeroHedge
- The Counter-Intuitive Rise of the U.S. Dollar | Financial Sense
- "The Information War For Ukraine" | ZeroHedge
- Ron Paul Explains Why The "Scottish Referendum Gives Reasons To Be Hopeful" | ZeroHedge
- Artist's Impression Of The Difference Between ISIS & America's Strategy In The Middle East | ZeroHedge
The most relevant financial news and articles from the Internets
- The Ruble Just Fell Out Of Bed | Business Insider
- MEET THE WALTONS: A Guide To America's Wealthiest Family | Business Insider
- One Chart Shows How Solar Could Dominate Electricity In 30 Years | Business Insider
- Pebble Slashes The Price Of Its Smartwatch To $99 Before Apple Starts Selling The... | Business Insider
- The Best Business Schools of 2011 | BusinessWeek
- Incredible Maps Show How Working-Class Neighborhoods... | Business Insider
- The Day 2 Hong Kong Protests Are Unbelievably Huge | Business Insider