Beware the low VIX.
12/29
Complacency Spells Trouble
Bernie Schaeffer
VIX has set several significant closing lows in the 23 region - 23.46 (February 15), 22.94 (May 24), 21.22
(June 5), 21.91 (June 21), 20.29 (July 2), 22.39 (August 3), and 22.29 (August 24). Subsequent to these
seven dates, the OEX dropped 6.7 percent in five days, 3.8 percent in three days, 5.7 percent in nine
days, 2.5 percent in four days, 5.2 percent in six days, 2.6 percent in three days, and 5.3 percent in four
days, respectively. The exact timing of these plunges is difficult to pinpoint, as the VIX sometimes
spends several days in the vicinity of these bottoms before hitting its extreme. However, with the VIX
currently sagging below 23, there is great risk of a VIX-induced sell-off. |
