Why Not to Be Afraid of Low Market Volatility

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July 2 (Bloomberg) -- On today’s “Insight & Action,” Bloomberg’s “Money Clip” Host Adam Johnson reports on market volatility. (Source: Bloomberg)

Afraid of low volatility?

Down to be.

-- don't be.

The vxx in there he is a measurement of how much volatility in the market for options.

When it's low, they are not pricing in fear.

The concern is that we are too complacent.

One analyst says go back to 1991 and you will see there were two periods of extended low volatility.

We are just at the very beginning of these long theoretically potentially low volatility time periods.

If you overlay the s&p 500 on top of the volatility, you'll see that during that low volatility, stocks not only rose but they ripped higher.

If we are at the beginning of low volatility, in theory that was suggest this market can keep going.

I asked chris verone earlier this morning about this.

He said we have had 402 days of the s&p 500 above the 200 day moving average.

If you go back into the 1950's, there have only been 10 times were it has been that long and we are in the middle.

The highest was back in 1953. just because we are low-volume and there is not a lot of fear priced in, don't let that discourage you.

If you take a closer look at this rally in particular, you will see seven times we have pulled back to the trendline on the to continue.

Low volatility, don't necessarily be afraid of it, it could be a bulls best friend.

We want to highlight a couple of stocks that are moving today.

Shares of shutterfly are rising

This text has been automatically generated. It may not be 100% accurate.


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