Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Buzz & Banter



Tony raised the interesting possibility that perhaps volatility could remain low for an extended period of time. Going back to 1993 a "normalized" range for the VIX was between 11-16. There were a few instances where the VIX spiked up above that range between 1993 and 1995. By 1996 the VIX trended higher to establish a new range in the 16-22 area, and then again in 1997 it trended higher toward its spike peak reading of 60 in 1998.

I agree with Tony that it is certainly plausible to consider that the trend is now downward toward lower levels of volatility readings. John has also pointed out a variety of factors that could cause this to happen. My only comment (a reminder really) is that we are seeing this low VIX reading, well below the norm we've grown accustomed to since 1996, in conjunction with a high risk level in the NYSE Bullish Percent Index. Historically, regardless of the range the VIX has been trading in, a reading in the lower end of that range combined with a high risk level in the NYSEBP has been a less than desirable time to establish new long equity positions.

No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos