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VIX Below 12!
The CBOE Volatility Index (VIX) has dropped below 12. Below 12!!! Surely this must be one of the signs of the apocalypse. Not so fast. A low VIX is a sign of option trader complacency, and complacency is a problematic sign for the market which can lead to a price decline. But when the VIX gets really REALLY low, the message changes. Sure, it is a sign of an absence of worry, and a correction is possible. But the really big price tops do not appear when the VIX is this low. In 2000, the SP500 topped after the VIX had climbed up from the really low levels of a few years earlier. The final price top came when the VIX ... (full story)
