Friday, July 14, 2017

A Cycle Inversion and Rising Volatility Favors Another Stock Market Crash In The Coming Years

A cyclical uptick in volatility is already underway. The real risk is that the volatility increase comes after a cycle inversion and stock market crash/decline. The places retail money at great risk as they chase prices higher to catch the rally they've missed since 2009. History will repeat, leaving the public as the bagholders of the next big decline. The public is not prepared.


Headline: 4 Reasons Why the VIX May Double in the Next Year

There has been much discussion lately about how stock market volatility is at near historic lows. The Chicago Board Options Exchange Volatility Index® (or VIX)1, a measure of implied or future volatility, is at a level of roughly 10 as of June 30, 2017. If one looks at the history of the VIX, it has typically averaged closer to 20. Over the last 20 years, there has been only one other period of volatility this low, over the 2004–2006 timeframe. This period was characterized by economic expansion and a strong stock market as the economy moved out of the 2000–2003 tech bubble burst. This period of calm came to an end with extremely high volatility as we entered the Great Recession of 2008.



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