Source: Goldman Sachs via FT Alphaville

 

 

Despite what you might have heard recently, as it turns out, periods of low volatility are not particularly unusual.

Have a look at the chart nearby. It comes to us from Goldman Sachs via FT Alphaville, and it shows that spikes in volatility are quite unusual. Periods of low or falling vol is what seems to fill the time between volatility spikes. Its like plains of tall grass between the occasional redwood tree.

I have no idea what this means for the markets for the next week or month. However, it does suggest that an overemphasis on either the so-called fear index or complacency could be wildly overdone.

Continues here

Category: Markets, Technical Analysis, Trading

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

4 Responses to “Volatility Over the Past Century”

  1. rd says:

    I think the big issue is that low volatility with relatively low volume and the increasing importance of low-cost index funds means that financial sector profits aren’t as good as they have become accustomed to. That, by definition, is a bear market regardless of what the indices are doing.

  2. CD4P says:

    Unlucky me! I just flipped on CNBC and managed to see Larry Summers at The Aspen Idea Festival. Larry just dodged a question built upon a zillionaire telling his other zillionaires to “Wake up! [because he] sees pitchforks among the commoners.” Larry’s response to Kelly Evans: “Oh, I have no way of assessing that.”

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