Loading ...Fear. and. greed index at. 89
plus. the. VIX. alarm is. ringing
When optimism is in oversupply, the stock market may be primed for a fall.
Traders are shorting a record number of futures contracts for the Cboe Volatility Index (VIX), writes CNBC’s Fred Imbert and Yun Li. And the VIX, which measures market volatility, is already near the lowest level it’s seen since July.
What this means is that the market is highly optimistic, despite an unknowable outcome to the U.S.-China trade war that has been eroding global markets for nearly two years.
“When you see a huge amount of complacency and excessive optimism … that’s when you oftentimes tend to get a snapback in the other direction,” explains Randy Frederick, vice president of trading and derivatives at Charles Schwab.