There has been much consternation over the death of stock market volatility. Some market observers say there is nothing to fear about the CBOE VIX index diving below ten – a historic lack of concern for stock market volatility. Others point to a tight range of the VIX – which is compiled based on put buying and selling in the S&P 500 options – as highlighting dangerous complacency and foreshadowing market downdrafts ahead. Moody’s Chief Economist John Lonski, however, takes a more circumspect view in a research note titled “Much Doubt Surrounds VIX Index’s Optimism.” He links the VIX to the high-yield bond market and says profit growth needs to advance from current levels to justify this Setup a free account to get access to this article (no credit card required).Login required to continue reading.
Historic Link Between High-Yield Bond Market and VIX
Mark Melin
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Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.
