I like to term the VIX or the CBOE Volatility Index, the Complacency Index, because it is an excellent gauge of whether or not traders are complacent or fearful. The higher the reading, the more fearful or worried they have become. The lower this index reads, the more complacent or careless they generally are.
One has to go back a period of 45 MONTHS (June 2007) to find investor psychology at these levels of complacency in regards to the broad stock market as indicated by the S&P 500. I should point out that this was one year prior to the credit meltdown of the summer of 2008. It would currently seem that hardly anyone on the planet is the least bit concerned about the level of the US equity markets due to the enormous amounts of Central Bank supplied liquidity.
I intend to keep posting this index at regular periods to keep an eye on this as I believe investors are growing very careless in regards to the potential for an apple cart upsetting event.
Something about this just does not "feel" right to me. While one cannot argue with the tape, or in this case, the charts, the fact that all of the woes tied to the enormous amounts of indebtedness in the West have essentially been papered over, is extremely disconcerting.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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