This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

[video] Quick Take: A 'New Normal' for Volatility

NEW YORK (TheStreet) -- The CBOE Volatility Index (VIX.X) continues moving lower on Tuesday. Mark Sebastian, head of trading at Swan Wealth Advisors, told TheStreet's Jill Malandrino that with the VIX down 6.5% to $14.28, he's "shocked" to see the stock market react to the current situation in such a bullish tone. 

Recent economic data have been quite weak and the Federal Reserve plans on keeping its monetary policy unchanged, he said. He attributed the rebound in U.S. equities to the stabilization in the Japanese yen and in emerging markets. 

However, the days of the VIX trading at or below $12 may be gone. According to Sebastian, the "new normal" for the VIX may very well be in the $14 to $16 range. 

He added that the long-term "normal" is near $17.50, while the actual long-term mean is closer to $20. 

To put it simply, equity markets are "normalizing" near current levels, Sebastian said. The VIX has been highly volatile, as expected, jumping from $14 to $21 and back to $14 all within two weeks.  

-- Written by Bret Kenwell in Petoskey, Mich.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%
YHOO $44.52 0.00%


DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs