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
- Major Cycle Low Upcoming in Gold | Financial Sense
- Trump Accidentally Reveals His Next Attack On Hillary | ZeroHedge
- How the US Dollar Influences Oil Prices | Financial Sense
- An Inside Look at the World's Biggest Paper Gold Market | ZeroHedge
- "The System Itself Is At Risk" Bill Gross Warns, Shorts Credit As "Day Of Reckoning Is Coming" | ZeroHedge
- Is Gold a Commodity? | ZeroHedge
- How Bad Are The US Computer Systems? An 8'' Floppy Disc Houses Nuclear Coordinate Data | ZeroHedge
The most relevant financial news and articles from the Internets
- The top 7 predictions for the future of media | Business Insider
- I spent years working from home — and it cost... | Business Insider
- The next big 'Pokémon' game looks amazing | Business Insider
- An honest mistake by Klay Thompson in his postgame press... | Business Insider
- We tested what might be one of the best hoodies out there | Business Insider
- DEUTSCHE BANK: The Fed is probably screwed (DIA, SPX, SPY,... | Business Insider
- Critics are split on the new 'X-Men' movie — here's why | Business Insider