{"id":1455047,"date":"2024-02-02T20:00:00","date_gmt":"2024-02-03T01:00:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1455047"},"modified":"2024-02-02T20:00:00","modified_gmt":"2024-02-03T01:00:00","slug":"vix-the-calm-before-the-storm","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/vix-the-calm-before-the-storm\/1455047\/","title":{"rendered":"VIX \u2013 The Calm Before The Storm"},"content":{"rendered":"

VIX \u2013 The Calm Before The Storm<\/span><\/p>\n

\n

Via SchiffGold.com,<\/em><\/a><\/p>\n

The VIX, often referred to as\u00a0\u2018Wall Street\u2019s fear gauge,<\/a>\u2018 is currently portraying a sense of calm among investors, registering well below the 20 level.\u00a0<\/p>\n

For those not acquainted, the VIX draws its value from S&P index options with near-term expiration dates, providing a 30-day projection of volatility.<\/p>\n

While the VIX isn\u2019t a precision instrument, it serves as a barometer of market sentiment.<\/p>\n

<\/a><\/p>\n

Presently, the VIX hovers near its lowest point since January 2020, a period preceding the upheaval caused by the COVID-19 pandemic. Investors, lifted by this low volatility, have been propelling the equity rally for a\u00a0substantial eight to nine weeks<\/a>.<\/p>\n

In early January, investor Steve Eisman highlighted the excessive confidence that marked the end of 2023 in the markets. For those unfamiliar, Steve Eisman gained notable fame for his role in \u2018The Big Short,\u2019 portrayed by Steve Carell in the movie adaptation of\u00a0Michael Lewis\u2019 book<\/a>, with the character\u2019s name changed to Mark Baum.<\/p>\n

In a\u00a0CNBC appearance<\/a>, Eisman expressed unease about the current year, stating, \u201cEverybody\u2019s just a little too fricking happy.\u201d<\/strong><\/em><\/p>\n

<\/a><\/strong><\/em><\/p>\n

Over the past year, the S&P 500 index has surged by 24%. There is a strong inverse correlation between the US equity markets and VIX. As the VIX declines, stocks typically rally, and vice versa.\u00a0<\/p>\n

Eisman\u2019s cautionary stance towards market hype resonates with the age-old trader axiom concerning the VIX: \u2018When the VIX is high, it\u2019s time to buy, when the VIX is low, it\u2019s time to go.\u2019<\/p>\n

At present, the prevailing VIX levels reflect a naive yet robust risk appetite in the financial markets, spurred by\u00a0discussions of rate cuts for 2024<\/a>.<\/p>\n

\u201cThe market scaled a wall of worry throughout the entire year [2023],\u201d remarked Eisman, highlighting that the majority of investors currently harbor optimistic sentiments about the economy. <\/em><\/p>\n

He added, \u201cEverybody is entering the year so bullish that if there are any disappointments, what\u2019s going to sustain the market?\u201d<\/strong><\/em><\/p>\n

The clear message here is that investors currently feel at ease driving up equities, buoyed by higher returns from the Magnificent Seven and a more accommodating interest rate environment, with no significant market shocks in sight.<\/p>\n

[ZH: And remember, the lagged yield curve is screaming for some serious volatility ahead…]<\/em><\/p>\n

<\/a><\/p>\n

If the equity rally continues to gain momentum, there\u2019s a potential for the rumored market\u00a0melt-up<\/a>. For the cautious observer, this raises sustainability concerns. Warren Buffett\u2019s timeless advice resonates perfectly in this season of soaring equity prices: \u2018When everyone else is scared, get greedy\u2014and when everyone else is greedy, get scared.\u2019<\/strong><\/em><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nFri, 02\/02\/2024 – 15:00<\/span><\/p>\n

\u200bRead More<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

VIX \u2013 The Calm Before The Storm Via SchiffGold.com, The VIX, often referred to as\u00a0\u2018Wall Street\u2019s fear gauge,\u2018 is currently portraying a sense of calm…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1455047","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1455047","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1455047"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1455047\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1455047"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1455047"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1455047"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}