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
- Latest Central Bank Sticksave Halts Futures Slide, Sends E-Mini Soaring After ECB Said "Looking To Buy Bonds" | ZeroHedge
- CPI Prints Smallest Possible Increase In September Even As Beef Prices Surge 17% In 2014 | ZeroHedge
- Summation Index Rate of Change | Financial Sense
- Caught On Tape - Some Folks Jumped The White House Fence, Again | ZeroHedge
- McDonalds Sales Plunge In Worst Month Since 2003 Following Dollar Meal "Sticker Shock" | ZeroHedge
- Speak, Switzerland! | Financial Sense
- Existing Home Sales Jump To Highest Since Sept 2013. Midwest Tumbles 5.3% | ZeroHedge
The most relevant financial news and articles from the Internets
- Sweden Is Learning Just How Insanely Difficult It Is To Capture An Enemy... | Business Insider
- 7 Questions To Ask Yourself Before Starting An Office Romance | Business Insider
- McDonald's Sales Fall More Than Expected (MCD) | Business Insider
- Ben Bernanke Gave A Private Speech To High-Powered Investors In Tokyo, Here's What He... | Business Insider
- Canadian Lawmakers Tweeting From Parliament: 'Mom I'm Okay I... | Business Insider
- Cuba sends more doctors to Ebola-hit west Africa | Business Insider
- Apple's Supply-Chain Secret? Hoard Lasers | BusinessWeek