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…
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