Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?



Is the Lack of Volatility a Sign of Market Resilience or Apathy?

By  +Follow June 27, 2014 12:46PM
Tickers Mentioned:

stock trading volatility, market new record highs, stock market pullback, stock market correction, end of bull marketWhile the market is never short on worries, the ability from traders and investors to consistently shrug off potential headwinds has been somewhat of a surprise in the first half of 2014. In fact, stocks seemed overdue for at least a pullback and a return to more volatile market activity, but that has yet to materialize. In our latest interview with Toni Turner of TrendStar Trading Group, we discuss what the continued absence of volatility is telling us about the current state of the market.

EQ: We’re near the halfway mark for the year, and among some of the bigger surprises this year is the absence of volatility. In fact, volatility is reportedly at a seven-year low. What gives?

Turner: That’s absolutely right. The Volatility index was recently at the lows it hasn’t experienced since 2007, and of course, that number always brings anxiety into the heart of the market. Of course, we have to remember that the VIX represents a measure of the market’s expectation of volatility over the next 30-day period.

Since the S&P 500 just keeps making new highs, the shorts have been repeatedly taken behind the woodshed and I think we’re seeing this market as cheerful, but very apathetic. We haven’t had a headline in a long time that has had the power to scare the market into a 10% correction.

It’s interesting to note that the Dow experiences a bull market correction every 12 months on average. Right now, the Dow is up about 59% from the last correction low of October 2011, and into its 37th month without a pullback.

Still, the bears have been proven wrong, so maybe our complacency right now could also be from their disinterest.

EQ: Earlier this week, revised numbers for Q1 GDP showed a 2.9% decline. The market managed to shrug off the revision with the expectation that the next three quarters would get a nice rebound from the bad winter. But that’s now in question as Q2’s forecast has also been ratcheted down on consumer weakness. Do you think this could manifest into a bigger problem for the rest of the year?

Turner: That may be. Durable goods orders were also down 1% for May, and that’s a more recent report.  We do see last month’s jobs numbers improving, however, the numbers out of the Commerce Department Thursday said inflation is heating up, but consumer spending is flat.

This can be a problem because points to slow growth with rising inflation. That could put a hitch in the stock market’s giddy-up. Of course, it would cause traders and investors to be more selective in stock choices.

EQ: Despite all the possible headwinds to worry about, the market continues to defy bears to keep hitting new highs. Are there any technical levels right now that stand in the way?

Turner: Of course, there’s 2000 on the S&P 500 as a key technical level. Then there’s 2300 is another key level, but we don’t have to worry about that for a while.

Interestingly, I pulled up the monthly chart of the S&P 500, and you can see that the last time the 14-month relative strength index was this overbought was in 2007 and in 1998. That 2007 RSI overbought level also goes for the PowerShares QQQ (QQQ) .

So while this market can certainly go higher in the current low-interest rate environment, once again, I’m suggesting that traders and investors have a plan in case the market decides to take a headwind seriously and profit taking comes in.

EQ: What sectors or industry groups are you watching now?

Turner: Well, because interest rates are falling in the short term—and that dynamic may reverse later in the year—we can look at the iShares US Home Construction (ITB) . Also in the same is the SPDR S&P Homebuilders ETF (XHB) .

I’m looking also at the PowerShares WilderHill Clean Energy (PBW) . I suspect that whether we like it or not, green renewable energy is going to be a definite wave of the future. It’s had some struggles to start, but it’s definitely going to happen. Some of the top components in this ETF are Polypore Intl, Inc. (PPO) , SunPower Corp. (SPWR) , and Calpine Corp. (CPN) .

One of my strategies is to explore  a sector ETF that I think has promise, and either trade that or trade it in concert with some of the attractive stocks within that component list.


DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Signup for our daily newsletter and get our best articles emailed right to you!

Results for VXX
Stock Aced
8 Oct 15 21:54:49
NUGT Direxion Daily Gold Miners Bull 3x Shares Yield http://t.co/WrVrcxj5a5 $NUGT $SSNC $VXX $BZQ #NUGT #stockmarket #stockmarket
8 Oct 15 21:49:35
XIV VelocityShares Daily Inverse VIX Short Term ETN Dividend http://t.co/fA5fQUs8e8 $XIV $F $EWS $VXX #XIV #stockmarket #investing
8 Oct 15 21:49:34
VXX iPath S&P 500 VIX Short-Term Futures ETN % Change http://t.co/Z6JIDQo4kW $VXX $WGBS $RWM $TSLA #VXX #stocks #nasdaq
8 Oct 15 21:49:33
VXX iPath S&P 500 VIX Short-Term Futures ETN 52Wk Low http://t.co/uHq8uYxxdq $VXX $SLW $EXAS $EWS #VXX #nasdaq #stocks
8 Oct 15 21:49:33
VXX iPath S&P 500 VIX Short-Term Futures ETN Market Cap http://t.co/cT4vHz6w6C $VXX $GBSN $LNKD $PBR #VXX #invest #investing
Investors Hangout
8 Oct 15 21:49:05
VXX iPath S&P 500 VIX Short-Term Futures ETN EOD Data http://t.co/iIYgaGYusF $VXX $SPXS $PSQ $VXX #VXX #pennystocks #stockmarket
8 Oct 15 21:49:04
VXX iPath S&P 500 VIX Short-Term Futures ETN Yield http://t.co/unrKdKTguh $VXX $FXE $IYT $CELG #VXX #finance #stocks
IH News Desk
8 Oct 15 21:49:04
VXX iPath S&P 500 VIX Short-Term Futures ETN Ask http://t.co/txquDokgSu $VXX $GOOGL $UA $YUM #VXX #nasdaq #finance
8 Oct 15 21:49:03
VXX iPath S&P 500 VIX Short-Term Futures ETN News http://t.co/gc5G80ZTXZ $VXX $DXJ $XOMA $LVS #VXX #stock #investing
8 Oct 15 21:48:47
VXX iPath S&P 500 VIX Short-Term Futures ETN Shares http://t.co/uy3MA0XQ0I $VXX $SDS $MDLZ $AEZS #VXX #invest #pennystocks
8 Oct 15 21:48:36
WFM Whole Foods Market, Inc. Short Sales http://t.co/QATH0IWljK $WFM $PSQ $IBM $VXX #WFM #nasdaq #invest
8 Oct 15 21:48:36
VXX iPath S&P 500 VIX Short-Term Futures ETN Company Info http://t.co/QeHPJp2Lmt $VXX $IBM $TZA $KITE #VXX #nasdaq #stockmarket
Investors Hangout
8 Oct 15 21:48:35
VXX iPath S&P 500 VIX Short-Term Futures ETN Last Price http://t.co/Hs4KuEVIr4 $VXX $DXJ $VZ $UWTI #VXX #share #stocks
8 Oct 15 21:48:34
VXX iPath S&P 500 VIX Short-Term Futures ETN E.P.S. http://t.co/pNSUWmyAgj $VXX $PLUG $SBUX $DAL #VXX #stockmarket #nasdaq
8 Oct 15 21:48:33
VALE Companhia Vale do Rio Doce SA Short Sales http://t.co/2u9eoj8xT3 $VALE $RMX.TO $BKPIX $VXX #VALE #tradeideas #invest
8 Oct 15 21:48:25
VXX iPath S&P 500 VIX Short-Term Futures ETN Filings http://t.co/OhHzGaFpVs $VXX $BABA $HYG $PM #VXX #investing #finance
8 Oct 15 21:47:04
TLT iShares Barclays 20+ Year Treasury Bond Fund Change http://t.co/CFSgJONuRR $TLT $ULTA $VXX $BKPIX #TLT #stockmarket #tradeideas
8 Oct 15 21:46:34
TIP iShares Barclays TIPS Bond Fund % Change http://t.co/8cSxeEiNIo $TIP $BABA $VXX $TBT #TIP #nasdaq #finance
8 Oct 15 21:46:33
TBT ProShares UltraShort 20+ Year Treasury Tick http://t.co/TSvIjoIvsR $TBT $VXX $TZA $EWS #TBT #share #stocks
8 Oct 15 21:45:11
SDS ProShares Ultra Short S&P 500 Day Low http://t.co/bQ0lzvWew4 $SDS $FV $VXX $HRL #SDS #stocks #finance
8 Oct 15 21:45:11
SLV iShares Silver Trust Last Price http://t.co/YgV00qTh8P $SLV $EBAY $AAPL $VXX #SLV #stock #nasdaq
8 Oct 15 21:44:03
RSP Guggenheim S&P 500 Equal Weight ETF Investor Opinions http://t.co/VFL3WzXEZQ $RSP $RDSH $VXX $FXE #RSP #stockmarket #stock
Rosner Stocks
8 Oct 15 21:44:03
QLD ProShares Ultra QQQ Fund Last Price http://t.co/5TwgFmUNhD $QLD $BBRY $VXX $JE.TO #QLD #invest #invest
8 Oct 15 21:43:34
QTRRF Quaterra Resources Inc. Tick http://t.co/Ii9h1ZGgLa $QTRRF $RGLD $VXX $TIP #QTRRF #invest #share
8 Oct 15 21:43:05
PLUG Plug Power, Inc. Change http://t.co/AqJPJKukdk $PLUG $CAT $EWJ $VXX #PLUG #stock #stock
Investors Hangout
8 Oct 15 21:43:03
NUGT Direxion Daily Gold Miners Bull 3x Shares Yield http://t.co/Cdw83VNekR $NUGT $SSNC $VXX $BZQ #NUGT #stockmarket #stockmarket
Rosner Stocks
8 Oct 15 21:42:04
MRO Marathon Oil Volume http://t.co/DFdVAyMzSb $MRO $VXX $AA $GE #MRO #stock #invest
Lucky Jimmy
8 Oct 15 21:42:03
NBIX Neurocrine Biosciences, Inc. Quotes http://t.co/5tC0HVIl1X $NBIX $VXX $USO $CNE.TO #NBIX #invest #invest
8 Oct 15 21:41:04
NAT Nordic American Tanker Shipping Ltd. Prev Close http://t.co/BoHME0IKOa $NAT $XOMA $VXX $EBAY #NAT #investing #stocks
8 Oct 15 21:40:34
MBLY Mobileye NV Financials http://t.co/13kENmZPpV $MBLY $VXX $MBLY $SNDK #MBLY #investing #stocks
8 Oct 15 21:40:03
LABU Direxion Daily S&P Biotech Bull 3X Shares Ex-Div Date http://t.co/pVWXFl8WOt $LABU $VXX $XLE $JJC #LABU #invest #investing
8 Oct 15 21:39:09
GOOGL Alphabet Inc. Stock Forum http://t.co/s436F2Wlpn $GOOGL $XIV $EWY $VXX #GOOGL #stock #share
8 Oct 15 21:39:07
HYG iShares iBoxx High Yield Corporate Bond Fund Stock Message Board http://t.co/XKIADpsS1q $HYG $UPRO $IYR $VXX #HYG #share…
8 Oct 15 21:37:36
GM General Motors Co. Current Price http://t.co/6Wy2GPc2i9 $GM $WMB $VXX $NEM #GM #investing #invest
Investors Hangout
8 Oct 15 21:37:10
FXE Currency Shares Euro Trust Ask Size http://t.co/yHqr8IrdTA $FXE $FV $UNG $VXX #FXE #tradeideas #tradeideas
Lucky Jimmy
8 Oct 15 21:37:08
FNMA Federal National Mortgage Short Sales http://t.co/O1ggCHxsMY $FNMA $GOOG $VXX $AA #FNMA #invest #stockmarket
IH News Desk
8 Oct 15 21:37:07
FXI iShares FTSE China 25 Index Fund News http://t.co/APFCk843dE $FXI $XLK $VXX $GDXJ #FXI #investing #invest
8 Oct 15 21:36:25
ERX Direxion Daily Energy Bull 3x Shares Ex-Div Date http://t.co/rBrb29fEyE $ERX $TVIX $DRT.TO $VXX #ERX #stockmarket #invest
8 Oct 15 21:36:23
EWY South Korea iShares Filings http://t.co/SNsVa6Wo0a $EWY $VXX $WMIH $AMZN #EWY #stockmarket #stockmarket
8 Oct 15 21:36:14
EPI WisdomTree India Earnings Fund Chart http://t.co/Rmz4gtX8sS $EPI $VXX $MCD $NATI #EPI #pennystocks #tradeideas
8 Oct 15 21:34:36
DDD 3D Systems Corp. Filings http://t.co/5Q5zjVkVAR $DDD $RUSL $DXJ $VXX #DDD #investing #stockmarket
IH News Desk
8 Oct 15 21:33:34
CVX Chevron Corp. Prev Close http://t.co/PcutXJQRsN $CVX $PVG $VXX $EWJ #CVX #tradeideas #invest
Stock Forums
8 Oct 15 21:33:16
CRK Comstock Resources, Inc. 52Wk Low http://t.co/kdh8yxRQ9H $CRK $VXX $XIV $HA #CRK #finance #investing
8 Oct 15 21:33:06
BAC Bank Of America Corp. Open http://t.co/6yqmvyZ1l8 $BAC $XOM $RSX $VXX #BAC #finance #stock
Rosner Stocks
8 Oct 15 21:32:04
AMZN http://t.co/gDEIa3FC7x, Inc. 52Wk High http://t.co/T14CHLpfJB $AMZN $V $VXX $FCX #AMZN #stocks #finance
8 Oct 15 21:31:34
AMD Advanced Micro Devices, Inc. Ideas http://t.co/jbiN7On8oy $AMD $VXX $BABA $WFM #AMD #stocks #invest
8 Oct 15 21:30:02
Everyone got caught slippin' in Aug 2015. We did too. But we were already up 103% heading into it. YTD 2015 > 60% $XIV $VXX $UVXY $VIX
8 Oct 15 21:08:09
RT @PeterGhostine: September 30th write-up predicted a sub-$20 low in the $VXX to end the post-August-crash relief rally. http://t.co/jG7Yn…
Stock Forums
8 Oct 15 20:48:42
VXX WMI Holdings Corp. Quotes http://t.co/1VZXD9c030 $VXX $NBIX $GILD $JBLU #VXX #stocks #finance
8 Oct 15 20:43:03
QLD ProShares Ultra QQQ Fund Ask http://t.co/MIghLxiT7C $QLD $GIB/A.TO $SMN $VXX #QLD #stocks #nasdaq
By  +Follow June 27, 2014 12:46PM



blog comments powered by Disqus

 Today's Must Reads

Market Got You Down?: Here Are Six Hot Stocks

Global Winners and Losers in the Oil Shakeout

This Bull Market is No Stranger to Big Fourth-Quarter Comebacks

When to Sell and When to Rent an Investment Property

Saving the Small-Cap Market


Small-cap stocks offer investors many benefits, ranging from higher growth potential to overlooked value opportuni... in Equities.com's Hangs on LockerDome

About us

Equities.com is an advanced financial data portal and social network designed to connect self-directed investors with the world’s most innovative startup and small cap companies. Through our in-depth coverage of small cap markets, comprehensive research and stock valuation reports, state of the art issuer products, and world class events, Equities.com provides the social tools and insight that drive tomorrow’s investment relationships and opportunities.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.

Login or Register