VIX at seven year low's

by Gary Glover

  • Last week marked the lowest rating in the CBOE Volatility index since early 2007.  The VIX is a very popular indicator to measure market expectations of near term volatility.  It is often referred to as a measure of fear or complacency in the sharemarket and is a barometer of this sentiment.
  • A high rating like that experienced in late 2008 near the end of the GFC indicates a very high level of fear in the market, while a low rating like early 2007 shows little fear and usually a hint of complacency.
  • Lows in sharemarkets come in times of high fear and extreme selling while highs are usually marked when everything appears perfect and markets are peaking or reaching a well established high.
  • This basically indicates that the market views very little risk currently and believes there is little to worry about.   Extremely low readings are synonymous with market peaks.
  • The extremely low reading is a warning that markets have become complacent and view very little risk in todays market. 


Gary Glover is an Authorised Representative (Rep No. 259215) of Novus Capital Limited ("Novus"). Novus is a holder of Australian Financial Services Licence No 238 168. Novus, its directors, officers, associates and employees each declare that they, from time to time, may hold interests in financial products and/or earn brokerage, commission, fees or other benefits from financial products mentioned in this e-mail or attached documents. Unless specifically stated within this page or an attached document, any information communicated by this e-mail constitutes unsolicited general financial product advice which has been compiled without regard to any investor's individual objectives, financial situation or needs. It is not specific advice for any particular investor. Before making any decision about the information provided, you need to consider the appropriateness of this information having regard to your individual objectives, financial situation and needs and consult your adviser. Any indicative information and assumptions used here are summarised and also may change without notice to you, particularly if based on past performance or relate to a future matter.

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