Dec 22 2006
Lack of “Volatility Worry” Getting Mention
We’ve seen only a handful of articles tucked in the pages here and there of various publications noting how the CBOE Volatility Index (VIX) continues to trade at levels demonstrating virtually zero worry about volatility hitting the markets. The WSJ is now in the game, pointing out that the VIX has again fallen below 10 — only the eight time since 1990. It should be noted that three of those “below tens” have happened in the last few weeks, including just prior to the dollar plummet on Thanksgiving Friday. VIX is trading in its 99th percentile in terms of indifference to risk.
The vigilant are taking note, especially given how many other indicators are lining up showing similar indifference on Wall Street. Overconfidence often breeds recklessness and stupidity, lest you forget the dot-com fiasco.
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