Minutes Digest for Feb 12 2021
Volume vs VIX
- Published:
2021-02-12 07:59:16 - Author: Jason Goepfert
Bloomberg notes an interesting divergence - volume across U.S. exchanges is soaring higher even while implied volatility ("fear") plunges. There is a very close positive correlation between the two, so this is highly unusual.
If we look at each of them compared to their ranges over the past 200 days, they're at opposite extremes.
That means that the difference between them is nearly 100% (volume near 100% of its range and VIX near 0% of its range).
This didn't mean much in 2017 as stocks went on to enjoy many months of a creeper uptrend. That wasn't so much the case with the others.