Since the VIX volatility index on the S & P500 contracts falls to new lows , many analysts are preparing for big changes in the market.
Many investors rely on the index of the Chicago Board Options Exchange YOUR VIX, watching the stock market volatility . Whereas the VIX continues to go down to historic lows 9.39 , many experts say about it , as an ” index of complacency .” If the index falls, the investor complacency grows. Economist Hyman Minsky argued that periods of high volatility followed by periods of low and so many investors are beginning to express concern that the ” Minsky Moment ” is already somewhere around the corner. He will raise the volatility and the risk premium on the shares , as well as lead to lower prices .
On Friday 23rd May , VIX closed the session on a minimum level of 11.36 per day . Widely being published an interview with David Tepper , hedge fund managers Appalosa Management, strengthened investor complacency .
Despite the words Tepper : ” I’m nervous . I think it’s time nervous. ” , Actually the opposite has happened . Although Friday S & P500 rose 0.42% to close at 1,900.53 record high , trading volume was small , remaining at 1.419 billion shares of S & P500, as they were before the holiday weekend . Moreover, consider the graph S & P500, we understand that its growth on Friday became the third triple top mark , which included a maximum of 2nd April and 13th May.
Currently there are signals , it is also narrowing the market. Line growth / decline capitalization-weighted index S & P500 and Nasdaq 100 bypass in terms of their counterparts , which means narrowing the market.