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The VIX! (Volatility Index) - 5-year chart

Started by pkamm, 05/08/2003 09:08PM
Posted 05/08/2003 09:08PM Opening Post
This one is fun to watch. A pretty good gauge of the market's "mood". 40+ indicates extreme tension. 50-ish is bordering on outright panic. Low 20's to high teens indicates high optimism, calm or complacency.

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Posted 05/09/2003 05:27AM #1
Hmmm, actually I don't think the OJ trial caused much effect on the VIX. If it did it was awfully smalland brief because I can't see anything on the 10-year chart.

I believe the 1998 spike correlates to the collapse of Long Term Capital Management and the whole derivatives crisis. This actually was a pretty huge threat to the global financial system at the time, it didn't cause panic in the streets because the public at large didn't really understand it or grasp the seriousness of the situation. There's another spike in 1997 where there was I think either the Russian currency crisis or another eastern currency crisis, it was in one of these years that the eastern markets sort of collapsed.

One thing that is interesting is how much volatility itself has steadily trended upward over the last decade -- even well before the bear market started. The volatility 'runup' in 1996-97 is particularly noticeable, like volatility stepped up to a higher 'plateau' in those years.

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