The dog days of summer are upon us. This means hotter than usual temperatures and vacation time for many folks. For those of us that have kids, this also means that all of that free time with them is winding down, as they’ll soon be returning back to school.
The financial markets –as of late –have also been on a bit of a hiatus. Volume over the last week has been the lowest of the year, and volatility has shrunk to multi-year lows. This unusually quiet environment has prompted many market participants to comment on how low the Chicago Board Options Exchange Volatility index (otherwise known as the VIX index) has been in the last week. Specifically, that it has broken 15, and has stayed below this number for a few days. The number fifteen in the VIX has been somewhat of a benchmark in recent years, since it has been associated with market corrections. Since this is the case, many believe that stocks are due for a pullback.
As is the case with any indicator, we must be careful not to use it as a primary decision tool, but rather as an ancillary indicator… Continue Reading
