Although the S&P 500 recovered almost all the losses suffered in January, investors remain nervous. With vague macroeconomic threats from emerging markets, contradictory signals from Europe, unexpectedly lower interest rates, and huge stock-market gains, everyone is now running around unsure of what to do next.
But at least one indicator – stock market volatility – shows little reason for immediate concern. Currently, volatility remains low and the difference between its past and forecasted level is stable. These two conditions are almost never associated with upcoming market weakness. Read the entire newsletter here.
Written by: Raul Elizaldeby