The VIX Closes Below 12

The S&P 500 is up again today, and we’re over 1,890, so we’re not far from another all-time high. It was one year ago today that Ben Bernanke first warned Congress that the Fed would soon taper its bond purchases. Bernanke was careful to say that they wouldn’t move too soon. The Fed finally announced the taper on December 18 to take effect at the start of January 2014. Despite many calls of disaster, the stock market has held up well over the last year. It appears that QE will be all gone by the end of this year.

Yesterday, the VIX, which is the Volatility Index, closed below 12 for the first time in nine months. If it keeps falling, the VIX could soon hit its lowest level in more than seven years. I don’t think volatility is a good or bad thing for equity prices. Volatility was quite low before the Financial Crisis, so it may be a sign of complacency.

Ross Stores is set to report after today’s close.

Posted by on May 22nd, 2014 at 10:28 am


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