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

Liked What You Read? Join Equities.com as a contributor and get eyeballs on your content FOR FREE!

Results for VXX
24 Nov 15 18:07:17
Breakout = 21.27 R2 = 20.04 R1 = 19.53 $VXX PIVOT = 19.17 S1 = 18.66 S2 = 18.30 Breakdown = 16.92
24 Nov 15 18:04:33
$GLD Filings Updated Tuesday, November 24, 2015 8:07:13 PM $VLTC $VXX $LOW $SPXL https://t.co/vQgBYiZMDt
Jeff Quiggle
24 Nov 15 18:04:05
#MacroScan: $UUP > $EWJ > $QQQ > $SPY > $IWM > $VXX > $EEM > $FXI > $TIP > $FEZ > $LQD > $TLT > $MBB > $USO > $DBC > $GLD > $JNK
24 Nov 15 17:57:04
$SKEWX 138.17 -1.34 $UVXY 27.58 +0.24 $VXV 18.71 +0.08 $VIX 15.93 +0.31 $VXX 19.03 +0.13 $VXO 15.24 +0.21 $OVX 47.17 +1.33 $JCJ 57.16 +0.00
Investors Hangout
24 Nov 15 17:50:03
VXX iPath S&P 500 VIX Short-Term Futures ETN News https://t.co/C976ddV3Uk $VXX $MAN $CMG $TBT #VXX #share #pennystocks
24 Nov 15 17:42:14
KRE SPDR KBW Regional Banking Index ETF Bid https://t.co/aUPJDtKpIZ $KRE $VXX $SUNE $PFE #KRE #investing #finance
IH News Desk
24 Nov 15 17:37:05
DUG ProShares UltraShort Oil & Gas Quotes https://t.co/Z5GGPIC74U $DUG $QLD $TSS $VXX #DUG #tradeideas #finance
24 Nov 15 17:36:09
CSTM Constellium NV Dividend https://t.co/RXxusj9kmy $CSTM $VXX $DIS $FXI #CSTM #tradeideas #pennystocks
Rosner Stocks
24 Nov 15 17:05:06
$TZA Investor Opinions Updated Tuesday, November 24, 2015 7:59:24 PM $UVE $AEZS $VXX $CTRP https://t.co/nFr5lqMbNQ
24 Nov 15 17:03:39
Asian equity markets fail to rally $SPY $VXX #iSharesMSCIJapanETF #iSharesChinaLarge-CapETF https://t.co/5VdpUwv71q https://t.co/97jlL3iQWK
24 Nov 15 16:59:16
$SPY $VXX What a dumb A$$ headline "Asian equity markets fail to rally" https://t.co/g9jYVh1Kc2
Smarter Analyst
24 Nov 15 16:56:46
S&P 500: Guideposts Nearby On Multiple Timeframes https://t.co/tNHnI1ICZB $SPY $SPX $QQQ $VIXY $IWM $VXX $SQQQ $TVIX
24 Nov 15 16:50:03
VXX iPath S&P 500 VIX Short-Term Futures ETN Ideas https://t.co/iHIGupfxby $VXX $GOOG $V $IBB #VXX #pennystocks #stock
24 Nov 15 16:49:02
USO United States Oil Fund, LP Message Board Posts https://t.co/rYOAI8fONH $USO $VXX $V $UA #USO #invest #share
24 Nov 15 16:46:04
RSP Guggenheim S&P 500 Equal Weight ETF Filings https://t.co/pP6uaUGNRm $RSP $FXE $VXX $HAL #RSP #tradeideas #finance
24 Nov 15 16:43:06
MYEC MyECheck, Inc. E.P.S. https://t.co/mVmcTbtoxY $MYEC $FET $VXX $XLF #MYEC #invest #nasdaq
24 Nov 15 16:36:32
ESPR Esperion Therapeutics, Inc. Prev Close https://t.co/D7pQf2iHRi $ESPR $VXX $ABBV $JNK #ESPR #stocks #pennystocks
Investors Hangout
24 Nov 15 16:33:11
AAP Advance Auto Parts Inc. Current Price https://t.co/B5nnfNMlrm $AAP $VXX $QID $MCD #AAP #invest #stock
Rosner Stocks
24 Nov 15 16:04:35
$PCLN Filings Updated Tuesday, November 24, 2015 6:59:24 PM $LQD $VXX $SCTY $CTIX https://t.co/SOjUqhLwt8
24 Nov 15 14:52:13
Mathiaspau: RT kthirum1: IHNASDAQOMX: AAPL Apple, Inc. Ask Size https://t.co/h8NjPS83jt $AAPL $JJC $XLY $VXX #AAPL #stockmarket #stocks
24 Nov 15 14:52:10
BinaryTrading13: RT https://t.co/cWMZj2dGgA IHNASDAQOMX: AAPL Apple, Inc. Ask Size https://t.co/h8NjPS83jt $AAPL $JJC $XLY $VXX #AAPL #s…
24 Nov 15 14:52:08
kthirum1: IHNASDAQOMX: AAPL Apple, Inc. Ask Size https://t.co/h8NjPS83jt $AAPL $JJC $XLY $VXX #AAPL #stockmarket #stocks
24 Nov 15 14:50:06
VXX iPath S&P 500 VIX Short-Term Futures ETN Ideas https://t.co/z6gU08c47O $VXX $M $DIS $BXLT #VXX #invest #nasdaq
IH News Desk
24 Nov 15 14:47:08
T AT&T, Inc. Bid Size https://t.co/l9zFtOEv0y $T $CSCO $V $VXX #T #tradeideas #stock
Mathias Paulsson
24 Nov 15 14:46:12
RT @kthirum1: IHNASDAQOMX: AAPL Apple, Inc. Ask Size https://t.co/h8NjPS83jt $AAPL $JJC $XLY $VXX #AAPL #stockmarket #stocks
24 Nov 15 14:46:03
SCTY SolarCity Corp. Stock Forum https://t.co/ywgrQqtuMW $SCTY $ERX $VXX $DIA #SCTY #invest #investing
Mathias Paulsson
24 Nov 15 14:45:12
RT @BinaryTrading13: RT https://t.co/0HMZ0d8PPL IHNASDAQOMX: AAPL Apple, Inc. Ask Size https://t.co/XIFivQntPX $AAPL $JJC $XLY $VXX #AAPL …
Binary Trader Pro
24 Nov 15 14:40:30
RT https://t.co/0HMZ0d8PPL IHNASDAQOMX: AAPL Apple, Inc. Ask Size https://t.co/XIFivQntPX $AAPL $JJC $XLY $VXX #AAPL #stockmarket #stocks
24 Nov 15 14:37:55
IHNASDAQOMX: AAPL Apple, Inc. Ask Size https://t.co/h8NjPS83jt $AAPL $JJC $XLY $VXX #AAPL #stockmarket #stocks
24 Nov 15 14:36:34
EEM iShares MSCI Emerging Markets Current Price https://t.co/S9GYax78eq $EEM $FIT $EUM $VXX #EEM #stocks #invest
24 Nov 15 14:36:02
CTIX Cellceutix Corp. Market Cap https://t.co/IZP9WKtm83 $CTIX $VXX $NFLX $CNR.TO #CTIX #stocks #invest
24 Nov 15 14:35:04
CAT Caterpillar, Inc. Stock Message Board https://t.co/YqsQ0EaE4M $CAT $SBUX $VXX $MYEC #CAT #pennystocks #investing
24 Nov 15 14:33:06
AAPL Apple, Inc. Ask Size https://t.co/8jvd66yLYG $AAPL $JJC $XLY $VXX #AAPL #stockmarket #stocks
24 Nov 15 14:29:38
#Stocks, #Bonds, & #Bullion Bid As Geopolitical Risk Soars Most In 62 years $FXE $HYG $GLD $OIL $SLV $SPY $VXX $SPX https://t.co/eBB6kxweVa
24 Nov 15 13:52:06
XLY Consumer Discretionary Select Sector SPDR Yield https://t.co/LJIKNRzOZp $XLY $DE $ACI $VXX #XLY #stock #tradeideas
24 Nov 15 13:51:13
VXX iPath S&P 500 VIX Short-Term Futures ETN Volume https://t.co/mDyxK8OTWW $VXX $PFE $DD $BIIB #VXX #stock #nasdaq
Sur Richi Trader
24 Nov 15 13:46:29
RT @MikeBellafiore: A lesson on trading bigger https://t.co/mFAAw0BwIE $STUDY $UVXY $VXX $IWM
24 Nov 15 13:42:07
JNUG Direxion Daily Junior Gold Miners Index Bull 3X Shares Quotes https://t.co/0HbNI4weee $JNUG $VXX $GDXJ $DGAZ #JNUG #nasdaq #nasdaq
EnryCons (Dr. Vega)
24 Nov 15 13:37:44
RT @VixCentral: $VIX futures contango settled at 5.16% Contago costs are medium for long term $VXX and $UVXY holders Explanation: https://t…
24 Nov 15 13:36:06
CVX Chevron Corp. Stock Forum https://t.co/UdcC8lkY3E $CVX $FXE $XLI $VXX #CVX #invest #investing
Eli Mintz
24 Nov 15 13:28:54
$VIX futures contango settled at 5.16% Contago costs are medium for long term $VXX and $UVXY holders Explanation: https://t.co/OtLNRueTcO
Top ETF Funds
24 Nov 15 13:23:32
Video: Big call spreads in the VIX.. https://t.co/VY3qr9cZoV $VXX #ETF #ETFs #Stocks
Malcolm Roebuck
24 Nov 15 13:22:22
RS1223 End of Day $XIV $VIX $VXV $VXX $UVXY #Volatility #Stock #Trading #Success #Forex See@ https://t.co/QRqIlwP9Iu https://t.co/evtHwSf5rS
24 Nov 15 13:20:01
PIRS DD 4 investors.Read here: https://t.co/vD9rNW2f06 $VWO $VWOB $VWR $VXDN $VXF $VXUP $VXUS $VXX
Malcolm Roebuck
24 Nov 15 13:18:38
RS823 End of Day $XIV $VIX $VXV $VXX $UVXY #Volatility #Stock #Trading #Success #Forex See @ https://t.co/QRqIlwP9Iu https://t.co/Y3OoIpLb3e
24 Nov 15 13:15:58
"Russian jet shot down by turkey" now there's a Thanksgiving headline $VXX $SPY
Silver Lining
24 Nov 15 13:10:26
Vol ETP Flow: $VXX $XIV $UVXY $SVXY $TVIX combined $2.63b flow (VWAP*volume) vs $1.641b in underlying $VIX futures. https://t.co/JgEwUQkFP0
24 Nov 15 13:08:19
RT @etfguide: (LISTEN) Asinine #Gold Predictions + Why #Volatility Equals Opportunity https://t.co/9OyDSdUeMr $GLD $VIX $VXX $GDX $NUGT $DU…
24 Nov 15 13:05:00
$VIX 15.79 #Contango 5.43 % $XIV gains 0.29% daily from contango $VXX holds 74% VX1 and 26% VX2 futures 14 trading days to expiration
24 Nov 15 13:03:37
RT @SwingWarrior: Momentum Day Trading Strategy For Beginners: https://t.co/cCZtnsCOmj | #Stocks #Trading $SPY $QQQ $VXX $USO https://t.co/…
By  +Follow June 27, 2014 12:46PM



blog comments powered by Disqus

 Today's Must Reads

What Crowdfunding Leaders Are Saying About the SEC’s Approval of Title III

How the Drug Price Scrutiny is Affecting Pharma Stocks

8 More Tips for Choosing the Right Crowdfunding Platform

Will the Post-Smartphone Era Bring Wearable Drones?

3 Cloud Stocks That Pay Dividends


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