Tags: Hulbert | volatility | stock | VIX

Hulbert: 'We're In for a Wild Ride in October'

By    |   Sunday, 28 September 2014 10:05 PM

The CBOE Volatility Index (VIX), which measures expected volatility in the S&P 500 index, surged last week as stocks have gone on a rollercoaster ride.

The VIX closed at 14.85 Friday.

And you can expect more of the same, says Mark Hulbert, editor of the Hulbert Financial Digest.

"Unfortunately for those of you who crave calm markets, October is likely to be even more volatile," he writes on MarketWatch.

While September is one of the most volatile months historically, over the past 30 years, October's average VIX level has exceeded September's by 12 percent, according to Hulbert's calculations.

"That's extraordinary, since the VIX in absolute terms today is no higher than where it stood 30 years ago," he writes.

Even excluding the extraordinary events that have occurred in the month of October, including the 1987 crash and the 2008 financial crisis, October's volatility is still above average, Hulbert notes.

And why is October such a high-volatility month? "I am unaware of any convincing explanation," he says.

"We're in for a wild ride in October."

Not everyone is concerned about the increase in volatility. The VIX' closing level of 15.64 Thursday was below its peak level during every major stock-market decline since 2012, Bloomberg reports.

"These periods of heightened volatility have been short-lived," Max Breier, a senior equity derivatives trader at BMO Capital Markets, told the news service.

"It may be the case that investors are looking for some follow-through on this selloff [in stocks] before volatility levels spike into the danger zone."

And so far, that follow-through hasn't emerged, with the S&P 500 index up 0.9 percent Friday to 1,983.

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The CBOE Volatility Index (VIX), which measures expected volatility in the S&P 500 index, surged last week as stocks have gone on a rollercoaster ride.
Hulbert, volatility, stock, VIX
271
2014-05-28
Sunday, 28 September 2014 10:05 PM
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