Market fear is rising, but it would appear
that someone forgot to tell the market. The CBOE Volatility Index looks set to
log its seventh straight rise Tuesday, in what would be only the third time the
VIX has managed that long a string of gains in the past 20 years.
But what is even more unusual is how the
S&P 500 is responding to the surge in expected volatility.
The S&P and the VIX tend to have a strong
inverse correlation, which makes sense, since the VIX roughly tracks
nervousness over potential market downside. But in the current VIX rise, the
market has stayed remarkably stable.
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