2017: A Record Smooth Ride For Stocks

Via Dana Lyons' Tumblr,

As measured by the VIX, stocks have never enjoyed a less volatile year than 2017.

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Undoubtedly the most notable phenomenon of 2017 was the extremely smooth ride enjoyed by U.S. stocks — unprecedented, in fact. One way to measure just how smooth (or volatile) the market was is by looking at the readings of stock volatility expectations, in this case the S&P 500 Volatility Index, aka, the VIX. And based on VIX readings, 2017 was the least volatile year ever in the stock market.

Specifically, the average daily closing price of the VIX in 2017 was 11.10 (through 12/26/17).

That is the lowest of any year — by more than one and a half points — since the VIX inception in 1986 (by comparison, the “average yearly average” is over 20).

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Furthermore, as the chart states, the maximum level reached by the VIX in 2017 was 17.28. That is the lowest maximum level attained in any year since inception — and 60% lower than the “average yearly max”. Obviously 2017 was an extraordinary year in its lack of stock volatility.

That’s interesting, but it’s also history at this point. What does it mean, if anything, for 2018? Are stocks now due for some serious volatility reversion?

Well, certainly stock market bulls cannot reasonably expect the unprecedentedly smooth ride to continue forever. Volatility levels were so far below historic norms that some increase should materialize in this next year. However, there is no reason that the relative low-volatility environment cannot persist further. There is no law suggesting that an imminent spike in volatility is likely. In fact, in our view, at this point it is more likely that the low volatility will continue in the near to intermediate-term.

Eventually, storm clouds will gather and the stock market seas will get choppy again. But for now, it is smooth sailing for investors.

Comments

PT sgorem Thu, 12/28/2017 - 08:49 Permalink

The commentary on the footprints in the grass is so much easier to undertand when you can see the other players in the field and who is holding the ball.

If I can work out how to translate that analogy back into the world then I'll let yas know.  Other than that, don't take it as a criticism of the article.  I can appreciate that it had to be said.
 

In reply to by sgorem

Tyler Durden DeepFriedLizards Thu, 12/28/2017 - 08:58 Permalink

As we said on several occasions already:

We are currently upgrading our Drupal server software and there may be some glitches in the transition over the next day or two. We are aware of the loss of the comment voting and we are working to restore it shortly. Please bring to our attention any function losses or other glitches during this transition.

In reply to by DeepFriedLizards

Kurpak Thu, 12/28/2017 - 08:35 Permalink

FIX THE COMMENTS SECTION.

Everyone stop replying until this gets fixed, the whole point of Zerohedge is the unfiltered up\down arrows.

Removing the voting silences our voices.

If this is a site bug or hack disregard. If this is the"new" style of comments no thanks and boycott.

BraceforImpact Thu, 12/28/2017 - 08:51 Permalink

Horseshit. 

 

Calm before the greatest financial collapse in world history. 

 

Fiat currencies fail, all of them. 

 

All currencies are fiat currencies, now propped up by a bunch Keynesian BS that is doomed to screw us all. 

 

Calmest year ever because people are absolutely delusional. 

 

Record debt, record printing, record QE, record stupidity. 

Blankfuck Thu, 12/28/2017 - 10:53 Permalink

The FED RESERVE FUCKERS  have a plan and that is to create an event and to blame it on the event when the market crashes! Mark this post, they have a plan so they are not to be blamed when the sit hits the fan! This market is a created delusion that WILL FAIL

Blankfuck Thu, 12/28/2017 - 10:53 Permalink

The FED RESERVE FUCKERS  have a plan and that is to create an event and to blame it on the event when the market crashes! Mark this post, they have a plan so they are not to be blamed when the sit hits the fan! This market is a created delusion that WILL FAIL

Blankfuck Thu, 12/28/2017 - 10:53 Permalink

The FED RESERVE FUCKERS  have a plan and that is to create an event and to blame it on the event when the market crashes! Mark this post, they have a plan so they are not to be blamed when the sit hits the fan! This market is a created delusion that WILL FAIL

Blankfuck Thu, 12/28/2017 - 10:53 Permalink

The FED RESERVE FUCKERS  have a plan and that is to create an event and to blame it on the event when the market crashes! Mark this post, they have a plan so they are not to be blamed when the sit hits the fan! This market is a created delusion that WILL FAIL

Blankfuck Thu, 12/28/2017 - 10:53 Permalink

The FED RESERVE FUCKERS  have a plan and that is to create an event and to blame it on the event when the market crashes! Mark this post, they have a plan so they are not to be blamed when the sit hits the fan! This market is a created delusion that WILL FAIL

Blankfuck Thu, 12/28/2017 - 10:53 Permalink

The FED RESERVE FUCKERS  have a plan and that is to create an event and to blame it on the event when the market crashes! Mark this post, they have a plan so they are not to be blamed when the sit hits the fan! This market is a created delusion that WILL FAIL

Blankfuck Thu, 12/28/2017 - 10:54 Permalink

The FED RESERVE FUCKERS  have a plan and that is to create an event and to blame it on the event when the market crashes! Mark this post, they have a plan so they are not to be blamed when the sit hits the fan! This market is a created delusion that WILL FAIL

Blankfuck Thu, 12/28/2017 - 10:54 Permalink

The FED RESERVE FUCKERS  have a plan and that is to create an event and to blame it on the event when the market crashes! Mark this post, they have a plan so they are not to be blamed when the sit hits the fan! This market is a created delusion that WILL FAIL

Blankfuck Thu, 12/28/2017 - 10:54 Permalink

The FED RESERVE FUCKERS  have a plan and that is to create an event and to blame it on the event when the market crashes! Mark this post, they have a plan so they are not to be blamed when the sit hits the fan! This market is a created delusion that WILL FAIL

Blankfuck Thu, 12/28/2017 - 10:54 Permalink

The FED RESERVE FUCKERS  have a plan and that is to create an event and to blame it on the event when the market crashes! Mark this post, they have a plan so they are not to be blamed when the sit hits the fan! This market is a created delusion that WILL FAIL

Blankfuck Thu, 12/28/2017 - 10:54 Permalink

The FED RESERVE FUCKERS  have a plan and that is to create an event and to blame it on the event when the market crashes! Mark this post, they have a plan so they are not to be blamed when the sit hits the fan! This market is a created delusion that WILL FAIL

Blankfuck Thu, 12/28/2017 - 10:54 Permalink

The FED RESERVE FUCKERS  have a plan and that is to create an event and to blame it on the event when the market crashes! Mark this post, they have a plan so they are not to be blamed when the sit hits the fan! This market is a created delusion that WILL FAIL

Blankfuck Thu, 12/28/2017 - 10:54 Permalink

The FED RESERVE FUCKERS  have a plan and that is to create an event and to blame it on the event when the market crashes! Mark this post, they have a plan so they are not to be blamed when the sit hits the fan! This market is a created delusion that WILL FAIL