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
- Greece Could Trigger a $9 Trillion Chain Reaction | ZeroHedge
- "We're Living In A Make-Believe World" Biderman Warns "A Global Recession Is Inevitable" | ZeroHedge
- Guest Post: Gray Skies And Memorial Day Reflections | ZeroHedge
- Is Greece Still a Country if Someone Else Owns Its Assets? | Financial Sense
- No Clues From Gartman About Today's Market Direction | ZeroHedge
- Argentina’s Growing Dependency on Beijing | Financial Sense
- Why "Average Joe" Will Never Do Well In The Stock Market | ZeroHedge
The most relevant financial news and articles from the Internets
- Now there's a program that lets novices hijack other people's... | Business Insider
- The ambitious plan behind Obama's $215 million program to transform... | Business Insider
- One photographer amassed thousands of Instagram followers after repeatedly... | Business Insider
- Bayliss appointed England head coach | Business Insider
- It's ugly in Texas | Business Insider
- US fighter jets scrambled for French flight to NY | Business Insider
- EU asks member states to admit 40,000 asylum seekers | Business Insider