{"id":17067,"date":"2011-12-22T15:29:04","date_gmt":"2011-12-22T20:29:04","guid":{"rendered":"http:\/\/www.thedisciplinedinvestor.com\/blog\/?p=17067"},"modified":"2016-09-20T19:08:47","modified_gmt":"2016-09-20T23:08:47","slug":"volatility-index-has-fear-subsided-or-just-seasonality","status":"publish","type":"post","link":"https:\/\/thedisciplinedinvestor.com\/blog\/2011\/12\/22\/volatility-index-has-fear-subsided-or-just-seasonality\/","title":{"rendered":"Volatility Index:  Has Fear Subsided or Just Seasonality"},"content":{"rendered":"<p>Levels of the CBOE Volatility Index (VIX) have been steadily creeping lower. \u00a0 Fear in our minds has certainly not subsided, despite the &#8220;Bazooka&#8221; introduced by Europe and the not so steady rise in equity prices. \u00a0 We haven\u2018t seen these levels of VIX (i.e. Sub 21) since July of 2011. \u00a0 As a matter of fact, the recent pattern in the VIX is very similar to that of what developed between May of 2010 until April of 2011. \u00a0 During this time period the market moved higher by approximately 25-30% after shaking out all the extreme volatility.<!--more--><\/p>\n<p><a href=\"https:\/\/thedisciplinedinvestor.com\/blog\/wp-content\/uploads\/2011\/12\/VIX-Index-1.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-17069 aligncenter\" title=\"VIX Index\" src=\"https:\/\/thedisciplinedinvestor.com\/blog\/wp-content\/uploads\/2011\/12\/VIX-Index-1.jpg\" alt=\"\" width=\"504\" height=\"358\" \/><\/a><\/p>\n<p>One could make the argument that with the unemployment levels improving and the Fed&#8217;s continued Zero Interest Rate Policy (ZIRP) that these levels are warranted. \u00a0 However, the spreads on the VIX Futures contracts paint a very different story. \u00a0 Most seem to be pricing in the fact that volatility will increase after the first of the year. \u00a0 As it stands, there is currently an almost 20% premium between the VIX Index and the front month futures contract that expires January 2012. \u00a0 The VIX index is currently trading at approximately $21 and the front month future is at $25.20. \u00a0 See table below for other futures expirations.<\/p>\n<p><a href=\"https:\/\/thedisciplinedinvestor.com\/blog\/wp-content\/uploads\/2011\/12\/VIX-Contango-1.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-17068 aligncenter\" title=\"VIX Contango\" src=\"https:\/\/thedisciplinedinvestor.com\/blog\/wp-content\/uploads\/2011\/12\/VIX-Contango-1.jpg\" alt=\"\" width=\"572\" height=\"192\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Levels of the CBOE Volatility Index (VIX) have been steadily creeping lower. \u00a0 Fear in our minds has certainly not subsided, despite the &#8220;Bazooka&#8221; introduced by Europe and the not so steady rise in equity prices. \u00a0 We haven\u2018t seen these levels of VIX (i.e. Sub 21) since July of 2011. \u00a0 As a matter [&hellip;]<\/p>\n","protected":false},"author":371,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[5,12],"tags":[100,481,283],"class_list":["post-17067","post","type-post","status-publish","format-standard","hentry","category-economy","category-markets","tag-economics","tag-economy","tag-technicals","et-doesnt-have-format-content","et_post_format-et-post-format-standard"],"acf":[],"_links":{"self":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts\/17067","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/users\/371"}],"replies":[{"embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/comments?post=17067"}],"version-history":[{"count":0,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts\/17067\/revisions"}],"wp:attachment":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/media?parent=17067"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/categories?post=17067"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/tags?post=17067"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}