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.

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