Low VIX not necessarily bearish indicator


Don't fear the lack of fear, options strategist Larry McMillan tells clients who may be worried about the VIX trading below 12 for about the first time since 2007. While this sort of complacency typically sets the stage for a short-term correction, focus on the bigger picture, says McMillan: Stocks can and have advanced as long as volatility remains trendless.

“These buyers of protection are hurting, having lost virtually all of the money that they’ve spent on protection in the last year and half, or more. Yet it seems as that as long as there is a heavy penchant for this protective put buying, the stock market will continue to rally."

ETFs: VXX, UVXY, TVIX, XIV, VIXY, SVXY, ZIV, VXZ, VIXM, CVOL, VIIX, XVZ, XVIX, XXV, TVIZ, IVOP, VIIZ

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Comments (2)
  • BrBss
    , contributor
    Comments (40) | Send Message
     
    "VIX trading below 12 for about the first time since 2007."
    VIX was below 12 in March and August of 2013.
    28 May 2014, 01:52 PM Reply Like
  • lecso
    , contributor
    Comments (150) | Send Message
     
    Great news, market will go up forever! LOL
    28 May 2014, 01:59 PM Reply Like
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