Despite all the wild fluctuations in the stock market, investors remain remarkably complacent, which could come back to bite them if recent trends repeat themselves.
The Chicago Board Options Exchange's Volatility Index , known as the VIX, is one of the most popular ways in which traders gauge market nerves.
Though by design an indicator of market activity over the next 30 days, the VIX is more often a gauge of immediate market sentiment.
The index has been in historically tame territory this summer, even as June offered three separate trading days of 200-point losses in the Dow and as geopolitical turmoil continues to circle.
"Lack of upside movement to the Volatility Index is indicating that we are in this neutral zone," says Art Hogan, managing director and head of product strategy at Lazard Capital Markets in New York. "Stocks are cheap, but nobody wants to buy them because there are too many macro concerns."
Those broader fears are well-publicized: Europe's sovereign debt crisis, the slowdown and impending "Fiscal Cliff" in the U.S., and global growth issues in China and other emerging market nations.
One reasonable explanation for the low VIX level — it's fallen by about one-third since its early June peak — is the simple lack of mid-summer stock market volume.Page 1 of 4 | Next Page