Market Overview

With Debt Ceiling Looming, Are Investors Too Compliant?

Volatility levels continue to drop in 2013 after a rather non-eventful 2012. Despite the fiscal cliff, debt ceiling debates and the $1 trillion platinum coin, investors seem rather calm.

VIX levels, which measure the expected volatility in the market and sometimes referred to as the "fear gauge", have been rather low considering current economic events.

 

 

VIX levels continue to drop in 2013

 

VIX levels remained relativiely unchanged in 2012 - source CBOE

 

And the trend is not just in the US. Emerging markets, which tend to be more sensitive to global macro economic conditions, are also seeing lower levels of volatility:

Volatility Emerging Market - source CBOE

Doubline's Jeffrey Gundlach refers to 2013 as the "Year of the Snake". That the markets are coiling, waiting to strike.

He may be on to something...

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Economics Markets Trading Ideas

 

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