Volatility continues to expand, and stocks are falling

In Is volatility setting up for an expansion? I suggested we may see a volatility expansion from the VIX at 12. The CBOE Volatility Index VIX has since gained 40% and the longer-dated 3-month VIX also implies a 20% higher volatility.

Today the VIX was down over -10% at one point and then reversed up to close in the green by 11%.


Investors should expect to observe more movement in stock prices as they are now spreading out in a wider range. The stock indexes have turned down into a normal pullback, down about -2.4% off their highs.

I mostly share observations of broad indexes to make general statements about their trend. Here is the NASDAQ and S&P 500 % off high over the past year to see how much they’ve reclined recently relative to prior losses.

Some hedging positions such as gold, long-term treasuries, or long volatility or short stock indexes have helped offset some of the stock market loss.

We’ll see how it goes from here…

Mike Shell is the Founder and Chief Investment Officer of Shell Capital Management, LLC, and the portfolio manager of ASYMMETRY® Global Tactical.

Mike Shell and Shell Capital Management, LLC is a registered investment advisor and provides investment advice and portfolio management exclusively to clients with a signed and executed investment management agreement. The observations shared on this website are for general information only and should not be construed as advice to buy or sell any security. Securities reflected are not intended to represent any client holdings or any recommendations made by the firm. Investing involves risk including the potential loss of principal an investor must be willing to bear. Past performance is no guarantee of future results. All information and data is deemed reliable, but is not guaranteed and should be independently verified. The presence of this website on the Internet shall in no direct or indirect way raise an implication that Shell Capital Management, LLC is offering to sell or soliciting to sell advisory services to residents of any state in which the firm is not registered as an investment advisor. Use of this website is subject to its terms and conditions.

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