Wall Street’s ‘fear index’ tumbles
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Started by metmike - April 13, 2019, 5:52 p.m.

Wall Street’s ‘fear index’ tumbles to 6-month low as stock market nears records    


"The VIX itself, which uses S&P 500 options to measure trader expectations for volatility over the coming 30-day period and is often referred to as a guide to the level of investor fear, has declined by 67% after spiking above 36 back in December amid a brutal selloff at the end of 2018."

"However, stocks have U-turned higher, with the VIX, which tends to move inversely to stocks, turning south. Gains for the market have been supported by an apparent reversal in policyby the Federal Reserve, which said a weakening global economy was giving it reason to pause interest-rate increases that had been seen as tightening financial conditions and roiling stock benchmarks. The tone was seen as an about-face from the Fed’s hawkishly received December meeting when it delivered its fourth rate increase of 2018, representing the ninth increase in borrowing costs for markets since the end of 2015.


The perception of progress in trade talks between the U.S. and China also has guided assets perceived as risky higher, and the haven 10-year Treasury benchmark yield                                                                                                                                                                                                           TMUBMUSD10Y, +2.80%                                                                                                                                                 has remained relatively quiescent, stuck in a range between 2.5% and 2.6%. 


"Those tandem moves have some market participants worried that the market could be due for a spike in the VIX. The VIX’s long-term average is above 19, but has spent long periods at well below average levels in recent years. Meanwhile, the S&P 500 has roared back 24% from its Dec. 24 low, the Dow has climbed 21.2% and the Nasdaq has surged nearly 29% over the same period."

By metmike - April 13, 2019, 5:55 p.m.
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Individual investors finally turn bullish, as stock market nears all-time highs    


 "The latest E-Trade StreetWise survey, released Friday, showed 58% self-directed investors calling themselves ‘bullish’ on the stock market in the second quarter of this year, a 12 percentage-point increase from the first quarter, when a 54% majority indicated they were ‘bearish’ in their stock market outlook. 


“A cloud over the market has been lifted, now that investors aren’t worried about the Fed being too aggressive, and we are also seeing signs of a potential breakthrough on the U.S.-China trade front,” Mike Loewengart, vice president of investment strategy at E-Trade told MarketWatch, arguing that these factors have helped convince his clients that there is room left to run in the current bull market."