“The VIX has sustained low levels during prior bull markets. From early 2003 through mid-2007, a time during which the S&P 500 rose about 33%, the VIX averaged 14.4,” according to the WSJ story. “Yet there are many market watchers who argue that the lack of volatility will prove fleeting and that investors are being lulled into a false sense of security.”
The VIX is “not at all oversold and that is important if this rally is to resume,” says Investors Intelligence technical analyst Tarquin Coe, adding that the 14-day Relative Strength Index (RSI), a momentum indicator, has a neutral reading.
“The lack of complacency as equity markets sit at long-term highs is bullish and will allow for further gains,” Coe wrote in a newsletter. “The euphoria, or even optimism, typically seen at market tops is absent, a strong clue that the rally has further to go. The S&P 500 is expected to soon reassert and again attempt a record high.”
CBOE Volatility Index
