Volatility is getting volatile

By in Markets

| 2 comments

So far in 2016, most stock markets have lost in a few days what they normally gain over a year, highlighting the old adage that stocks go up a flight of stairs, but fall down an elevator shaft. Fear and Greed. Hasn’t changed even with HFT and algo’s.

John Kicklighter from DailyFX has an interesting chart out this morning comparing the Volatility Index or VIX average reading by month since 1990, showing January seasonality rolling over from the Northern Hemisphere winter:

volatility vix

So far in January the VIX is well above last years print and the long run average:

$vix_us_price_daily.14jul15_to_16jan16

While the weekly chart shows the bottoming – or Minsky moment if you will – for the VIX in mid 2014 now exploding to the upside and moving up to levels not seen since the last major risk market ructions in 2011:$vix_us_price_weekly.15apr10_to_26apr16

We may be going into a period of “Sell in May” and come back in…well 2017? 2018?

Chris Becker

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Comments

  2. CSS14

    I personally have no investment in mining stocks, however am alarmed at the rate at which which their share price is collapsing right now. They’re truly getting slaughtered!