Market Not Complacent--8/14/2017
One of the four pillars of my research is how complacent the market is. I check this using the VIX index to see how the market participants are reacting to market moving news. When big news is ignored, the market is complacent and this adds a layer of downside risk to prices.
For awhile, the talking heads have been discussing the super low VIX readings and how that could be a bad omen for the market. But on the idea that we could engage in nuclear war with North Korea, the VIX spiked about 50%. That is akin to saying that the fear in the market jumped 50% on this news.
That makes sense and shows me the market is correctly pricing risk, reward, fundamentals, and trends.