Volatility (VIX) is an interesting concept (click on the chart to enlarge it). The main idea is that when it is low, as now, it implies complacency. And this is bearish for stocks. Too much optimism is a negative. This is the conventional wisdom.The problem is that in a prolonged long-term bull market, bullishness can last for months. Or, to put it in another way, VIX gives useful information when you look back. But no one can tell if it is going to rise -- now. It will -- eventually. But this idea has little investment value because between now and "eventually" the market could soar.
George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest
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