That’s the question top of mind, as investors revisit portfolios and traders returning to desks after the holidays, to a buoyant market. so far this month to 21 Jan 2013, the XJO has returned 3%.
4800 level of the XJO is a level not seen for 2 years.
Last time we were at this level was late Jan/early Feb 2011
Let’s look at the market’s volatility in Feb 2011.
The XVI then was 16%, after touching a low of 12.5% 2 months before (Dec 2010).
This cycle, same level on the XJO, but the XVI touched a low of 10.5% (last Thursday).
Points to note:
– since 10.5 last Thursday, in the last 4 trading sessions, the XJO has been staying above 11%. Volatility has been trending up. Not a signal to sell the market, but indeed, investors are more vigilant as they come back and LESS complacent.
– the VIX index in on the CBOE was at an all-time low on Friday as well 12.5. but has not shown the trending up we have seen locally in Australia.