From late March through mid-June, equity markets were fast asleep, and volatility was non-existent. The VIX volatility index (also known as the “Fear Gauge”) had dipped down into the 12s, and it was a snooze-fest on trading floors. At the end of June, though, Greek debt problems popped up in the headlines again, and then China’s stock market decided to collapse. For a couple of weeks there, the bears came out of hiding, and volatility spiked. As shown in the chart below, the VIX index rallied up to 20 in a very short period of time.
But in even less time than it took to get up to 20, the VIX has moved back down, and as of today it’s at a new 2015 low! Talk about a quick turnaround.