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Saturday 6 May 2017

Where did the fear of the market disappear?

The United States bombed Syria last week, which led to a sharp reaction by Russia. However, the markets did not react, with leading US indices are at or close to new records.
The question that is harassing the experts is - "Where did the volatility disappear?"
The broad US state index S&P 500 still rises, with the index was at about +0.1% before the bombing in Syria.
"If someone pledges potential military conflicts in the future, it definitely counts on a serious correction for the market," according to analyst Gordon Johnson of Axiom, quoted by CNBC.
"To be honest, we have been in the secondary bullish market since 2009, so people who manage money have not seen a downward trend in the market at all. Everyone wants to believe it is possible. So they do not take the bad news into account", the expert added.
According to experts, a certain level of concern among investors is generally healthy during the bullish market. And such fears are currently almost absent, at least on the basis of the levels of the popular index measuring the volatility of the market is traded - VIX.
The latter is at levels of just under 11, or close to its lowest values, over the past few years.
The VIX Index uses the options based on the S&P500 wide index to measure the magnitude of expected volatility over the next 30 calendar days.
A value of the indicator below 13.5 points for such a long period of time means only one - the market participants are not afraid. According to many analysts, the VIX index is a "counter-indicator," which means low values ​​indicate a lack of fear and a potential downturn in the market.

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