The market reacted pretty negatively to that event the last two times it happened. However, there were two periods in the past where it was not a problem for the market. Here are the charts.
It never happened between 1997 and 2004. We did not see an event after mid 2007 until 2011. I guess the question is simply this. Do you believe the current situation is similar to the middle 1990s and 2000s or not?
Bob
2 comments:
I believe when reading the VIX, it's all about current level in relation to the current average. Market moves may be somewhat unpredicatable, mean-regression is a reliable truth. So for me, when looking to short or go long, knowing where the VIX is in relation to its mean adds one point of confluence to my thoughts.
-Dave
Along with mean regression in markets, making multi year highs and lows can also be significant.
Bob
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