The VIX Drops Again Signaling A No Fear Market
The Market Volatility Index(VIX) has declined by 13.00 points since making its recent high on March 16, 2011 at $31.28. When the VIX declines it is a sign that the market volatility has declined. Many investors and traders will use the VIX as a fear gauge for the stock markets. Often traders will add risk when the VIX declines as there is very little fear. Smart and savvy traders may want to buy VIX contracts as protection when the VIX declines so sharp and so suddenly. When the VIX declines the major stock indexes will usually trade higher. The opposite is true when the VIX jumps or trades higher the major stock indexes will decline. The all time high for the VIX was in October 2008 when the VIX traded at $89.53.