Volatility

VIX081017

I wanted to show this amazing volatility chart. Almost two years ago, I showed a chart with volatility VIX of 12, which is synonymous to tranquil waters with a certain uneasiness, they were uncharted waters. The current reading of VIX 70+ is not encouraging either, it’s quite unusual, and worse of all, stock indexes align themselves inversely to changes in the VIX, confirmed by the direction of the major indices.

But, the movement has been fast and extreme, which tells me two things: there should be a regression to the mean, but, the momentum has been too strong in the bear direction, hence, the bleeding should continue for quite some time…