Tuesday, February 4, 2014
Volatility Chart Vix and VXN Shows Fear From Mondays Crash
http://ca.finance.yahoo.com/echarts?s=%5EVIX#symbol=%5EVIX;range=1d
January produced the worst stock market performance since May 2012 and February has not gotten off to an auspicious start, as the benchmark S&P 500 index lost 2.3% on Monday, while the narrower Dow Jones Industrial Average (DJINDICES: ^DJI ) fell 2.1%. Small-capitalization issues -- which outperformed their large-cap brethren last year -- fared even worse, as the Russell 2000 Index posted a 3.2% drop.
Meanwhile, the "fear trade" was a winner today, as the SPDR Gold Shares (NYSEMKT: GLD ) rose 1%. The VIX (VOLATILITYINDICES: ^VIX ) , a measure of investor expectations for stock market volatility over the next 30 days that is known as "Wall Street's fear gauge." gained 16.5%, to close above 20 for the first time since December 2012.
For the S&P 500, today's decline was the worst since a 2.5% loss registered on June 20, 2011...
- Stock market values that became overextended after a 30% run-up in the S&P 500 in 2013.
- A market that is rediscovering risk (i.e., normalizing) as the Federal Reserve begins to slow the extraordinary stimulus it has been providing asset markets through its bond purchase program.
Fool.com