Tags: Volatility | Index | VIX | Sentiment

Volatility Index Becoming Very Volatile

By    |   Tuesday, 22 Jul 2014 07:43 AM

Over the past year, the CBOE Volatility Index (VIX) has traded in a range between 10.28 and 21.48. This is one of the lowest ranges the VIX has been in for the last 20 years.

Measuring from the low to the high, we are talking about a range of 109 percent for a 12-month period.

This past week, the VIX traded as high as 15.38 and as low as 10.59, a range of 4.79 and measuring the same way did the 12-month range, we are looking at a range 45.2 percent for one week.

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

Part of the reason for the VIX being so jumpy over the past week can be attributed to earnings reports, but thus far the earnings reports have been mixed with approximately half of the companies meeting or exceeding expectations and half disappointing.

With the expectations being considerably higher this earnings season, I was a little concerned about stocks being able to meet the expectations. So far it has been a typical earnings season.

The other main sentiment indicators, the 21-day moving average on the CBOE Equity Put/Call ratio and the AAII Sentiment Survey, have been moving toward more neutral readings in recent weeks.

The 21-day moving average on the CBOE Equity Put/Call ratio has moved from 0.5019 to 0.5519. The 0.5019 reading on July 2 was the lowest reading in over four years.

The AAII Sentiment Survey ratio of bulls to bears was at 2.1 as late as June 12, but it fell to a reading of 1.28 this past week.

Seeing the sentiment readings become more neutral makes me feel more comfortable about the earnings season as it continues.

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

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Over the past year, the CBOE Volatility Index (VIX) has traded in a range between 10.28 and 21.48. This is one of the lowest ranges the VIX has been in for the last 20 years.
Volatility, Index, VIX, Sentiment
296
2014-43-22
Tuesday, 22 Jul 2014 07:43 AM
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