Volatility Index On The S&P 500 Shows Investors Feel Little Fear About The Equity Markets

The VIX hit a high one year ago of 48 after the downgrade of US debt by S&P and Greece’s teeter on the brink of disaster. During that period, the S&P 500 fell almost 17% in just over 10 days.
One year after the VIX reached a high of 80.86 on November 20, 2008, the S&P was up 45%. A reading of 45.79 in May of 2010 spurred a market gain of 25% by May of 2011.
The VIX is an indicator of the prices investors pay for protective options contracts on the S&P 500. A reading of 30 indicates fear, 40 indicates panic, and 20 or below indicates that investors are not worried about the market.
Some technical analysts use the VIX as a contrary indicator. If that holds, it’s reasonable to think that the market may not go anywhere for a bit while the VIX consolidates around a predicted floor of 15.

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