Market Overview

MKM Partners Says To Expects The Vix Curve To Cycle Trough To Peak, Sees Elevated Spot Floor Between 15-17 Range

MKM Partners Says To Expects The Vix Curve To Cycle Trough To Peak, Sees Elevated Spot Floor Between 15-17 Range

In a new report, MKM Partners analyst Jim Strugger discusses the market implications of the recent pickup in volatility. According to Strugger, traders should take a cautious approach to stocks regardless of whether or not a bear market has begun.

From a historical perspective, every major bear market and market pullback since 1990 has occurred within extended high-volatility periods in the S&P 500. MKM notes that the market entered one of these high-volatility periods in mid-2015.

The SPX averages a positive monthly return about 67 percent of the time and the VIX averages around 14. During the last extended period of volatility, from 2007 to 2013, the SPX only delivered positive monthly returns 53 percent of the time and the VIX averaged 24.

For now, MKM expects “the VIX futures curve to cycle from trough to peak with the elevated spot floor in the 15-17 range.”

Related Link: Rolfe: Berkshire Still Better Bet Than Small Caps

Strugger says that regardless of whether or not the bull market is dead, traders should be ready for a higher-risk environment. “Whether or not a bear market is underway remains inconclusive from a volatility perspective,” he notes.

So far this year the SPDR S&P 500 ETF Trust (NYSE: SPY) is down 2.3 percent and the iPath S&P 500 VIX Short Term Futures TM ETF (NYSE: VXX) is up 13.1 percent.

Disclosure: the author holds no position in the stocks mentioned.

Posted-In: Jim Strugger MKM VIXAnalyst Color Specialty ETFs Analyst Ratings Trading Ideas ETFs Best of Benzinga


Related Articles (SPY + VXX)

View Comments and Join the Discussion!

Latest Ratings

View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at