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  • Beware of more volatility

    Amanda Diaz at Talking Numbers1 day ago

    Thursday’s  selloff in stocks sent the smell of fear trickling across the markets.

    The CBOE Volatility Index, also known as the VIX or ‘fear index,’ jumped to its highest level since April, and had its best two-day stretch since the start of the year. In fact,  while  the stock market closed the month in the red, the VIX was up more than 45 percent—its biggest monthly increase since July 2011.

    T he VIX , however,   is still  at fairly low levels compared with recent years—the index is currently trading just under 17 as opposed to 40 back in 2011—and historically, a sharp surge in the index is often followed by an equally sharp selloff.

    So, should investors brace themselves for more volatility? Or could this just be a one-time event?

    “First off I want to make sure everybody is very clear, the VIX is a measure of volatility, not a measure of market direction,” said David Seaburg of Cowen and Co., who believes volatility will continue to grind higher.

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