According to NewsMax this morning, the fed not raising interest rates had a lot to do with it.

VIX had an eleven handle a few days ago. Scary !!

Ok...what is Vix and what does it being so low indicate?

The VIX is a financial indicator = mathematical formula that measures price stability over a period of time. It's a past performance indicator used to predict future market trends.
Price stability = confidence in the market = level of stress/fear in the market.
It's been some time since school so may not have the numbers quite right; numbers under 20 indicates stability in the market = positive/good feelings. Numbers above 40? indicate instability in the markets = uncertainly/stressed feelings.

Of note, the markets are driven today by perception of current events on market price movements. And as the markets move, in general, sectors and individual stock prices move.

I predict 2024 will be an economic boom year. Got to insure Democrat victory in November.

I am not sure what Scott means by "price stability" but I THINK he is referring to STOCK price stability rather than the prices of goods & services.

I would differ a little bit from that explanation.

VIX is a calculation of the EXPECTED volatility for the next 30 days. As Scott rightly points out it is a complex calculation that you really don't need to do yourself. But that calculation is based on the prices of out-of-the-money put and call options on the S&P 500 index for the upcoming 16 & 44 day periods.

If the demand (from investors or speculators) for protection or hedging is low....then that will result in a lower value on the VIX calculation.

VIX is calculated constantly in real time and most everyone can see it on their broker's platform.


Generally, it gives an idea of how anxious or complacent traders are about the market actions over the next month. It can also give you an idea about how expensive or cheap the market may be at the moment.

It is often used as a contrary indicator. Low readings, such as now, may indicate a market top or close to it........but that condition can go on a long time without disruption.

There are a couple of 'old sayings' that often are applicable.

" When the VIX is high, it's time to buy" This is usually the case if the market is selling off or "crashing".

" When the VIX is low, it's time to go"..............meaning it's time to sell and take profits before the market tumbles.

So.......what is "HIGH" and what is "LOW" ?


That depends a lot on what is causing the market to do what it's doing and the magnitude of the move OVER TIME. Time is a critical part of volatility. BUT............the lowest I have ever seen was 10. something and the highest was in the 60's that I can recall.


When the market goes up, VIX will usually go down and vice versa


Angela, I know this stuff is not interesting at all to most people but, considering your interest in this subject, I have run my mouth a lot here.

Here is a good book on the subject of volatility and how it impacts pricing

https://www.amazon.com/Option-Volatility-Pricing-Strategies-Techniques/dp/0071818774

And here is a discussion of VIX on the CBOE website. CBOE created and owns VIX

https://www.cboe.com/tradable_products/vix/

Good to see a nice rise in the stock market. Opens up some options for planning.

lBryce

I guess I invested in the wrong stuff. A couple of years ago I took 5K out of my savings and put into the stock market as I hated seeing my money in savings lose value.
I'm still a negative in the market for what I put in.

Looking back, would have been better to invest that 5K in more equipment IMO.