The Buzz

All markets and investing news all the time

Where's the drama on Wall Street?

June 25, 2014: 12:30 PM ET
The S&P 500 has closed 1% higher or lower in 47 trading days, the longest streak since 1995.

Hold! The S&P 500 has closed less than 1% higher or lower in the past 47 trading days, the longest streak since 1995.

The Dow may have fallen more than 100 points on Tuesday, but don't let that minor selloff fool you. The stock market is enjoying its longest stretch of calm since Mel Gibson battled the Brits as William Wallace in the blockbuster film "Braveheart."

During the turbulent days of 2008-2011, Wall Street experienced 1% moves almost regularly amid deep disagreement over the state of the global economy.

But the S&P 500 has gone 47 trading days since closing up or down by 1% or more. That's the longest such stretch since the end of 1995, according to Dan Greenhaus, chief global strategist at BTIG.

In other words, back when Mel Gibson was a respected actor and director on Hollywood's A-list as opposed to being the punchline of jokes.

"Like it or not, we are stuck. Liquidity is light, conviction is low, the weather is warm outside, and people are more focused on watching Luis Suarez bite people than on doing their jobs," Michael Block, chief strategist at Rhino Trading Partners, said in a note on Wednesday alluding to the star player on Uruguay's World Cup team.

The last time the S&P 500 finished the day with a 1% or more move was April 16. Since that point, the market has popped about 5% to shatter more all-time records.

Related: Where's the fear in the stock market?

The lack of 1% moves shows that volatility has all but vanished on Wall Street.

The VIX (VIX) volatility index, known as the market's "fear gauge," recently tumbled to the lowest level since February 2007.

The market's

The market's "fear gauge" has plummeted since topping out at nearly 90 during the financial crisis.

CNNMoney's Fear & Greed Index, which looks at the VIX and six other gauges of market sentiment, has been showing signs of Extreme Greed for the past few weeks.

Despite the fact that stocks have rallied during the recent stretch of calm, bearish investors see the low turbulence as a sign that the markets have gotten complacent.

Even Janet Yellen acknowledged the low levels of volatility. During last week's press conference in Washington, the chair of the Federal Reserve said low volatility could even pose a risk to "financial stability" if it fuels excessive risk-taking.

Related: These stock market 'records' aren't that great

But Greenhaus notes that this level of low volatility is not even close to being a record.

The 1995 streak of no 1% moves for the S&P 500 lasted 95 days.

Greenhaus also pointed to a ridiculous 166-day stretch in 1963 without a 1% move.

Related: Buffalo Wild Wings is a clear cut World Cup winner

While many investors may cherish the lack of dramatic moves, shareholders of big Wall Street banks like Goldman Sachs (GS) and Morgan Stanley (MS) can't be too thrilled.

That's because the tranquil markets will likely hurt the trading profits of banks as well as hedge funds.

"Volatility is in many ways the lifeblood of financial markets," said Greenhaus. "If prices aren't bouncing around, then there are fewer short term mispricings to exploit."

  • Investors should stop freaking out

    The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.

    Sit back and have a shot of Turkish Raki. Or a nice glass of Chenin Blanc from Cape Town. Maybe a Caipirinha so you can pretend you are on a beach in Rio.

    In other words, MORE

    - Jan 30, 2014 1:06 PM ET
  • Stocks may be up, but fear is back in market

    The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.

    Stocks bounced back Tuesday after their worst sell-off of the year. Gold rebounded as well, following two consecutive days of staggering declines.

    It's a good sign that stocks (and to a lesser extent gold) are stabilizing. MORE

    - Apr 16, 2013 12:22 PM ET
  • Investor fear on the rise

    Political gridlock in Italy is unhinging investors.

    Investors worry the results of Italy's election could wind up undermining the progress that Italy has made in overhauling its troubled economy.

    "It was the worst possible outcome, feared by market participants and European policy-makers alike," said Daiwa Capital Markets European economist Tobias Blattner.

    U.S. stocks spiraled downward in a late-day frenzied sell-off Monday. European markets followed their cue and sold off sharply early Tuesday.

    CNNMoney's Fear MORE

    - Feb 26, 2013 10:15 AM ET
  • Bracing for more fiscal cliff volatility: VIX rallies

    Who's worried about the fiscal cliff? Who isn't. One look at the market's fear gauge, the VIX, and it's pretty clear that investors are among those feeling some agita.

    Over the past month, the VIX has surged nearly 30%, hitting its highest level in months. And with mere days left for President Obama and Congress to reach a deal on the fiscal cliff, it's no wonder investors are bracing for MORE

    - Dec 27, 2012 11:55 AM ET
  • VIX spikes 10% as Congress flounders

    Remember the VIX? Probably not. Wall Street's measure of volatility has been pretty forgettable in 2012.

    Not on Friday. The CBOE Volatility Index (VIX) spiked by as much as 10%. The index itself was particularly volatile Friday, closing up just 1%.

    Congress and its inability to come together over the fiscal cliff wasn't the sole trigger of the heightened volatility. Friday was also quadruple witching day -- one of four trading days MORE

    - Dec 21, 2012 2:37 PM ET
  • Beware of investor complacency

    Investor malaise has settled in like a hot summer day. And it's just as uncomfortable.

    "Our volume is as muted as it can be and the VIX is down sharply," said John Kosar, director of research at Asbury Research in Schaumberg, Ill.

    Kosar is talking about the Chicago Board of Trade's volatility index (VIX), Wall Street's notorious fear gauge. It has barely budged above 20 during the past month. It is now MORE

    - Aug 7, 2012 9:49 AM ET
  • Investors push Fear & Greed into neutral

    Who knew Europe could wield so much power? A deal, and not even a very concrete one, is sending investors on a buying spree.

    Related: Euro 'breakthrough' is tenuous

    Stocks around the globe rallied on the surprise announcement, which could mark the first baby step toward creating a banking, and ultimately fiscal, union. Of course, there are about a thousand details that need to be hammered out but for now everyone is MORE

    - Jun 29, 2012 12:58 PM ET
Fear & Greed
Sponsored by

To view my watchlist

Not a member yet?

Sign up now for a free account
Stupid Stock Move of the Day
#StupidStock Move of the Day! Sneaking in before the close. $HD up a little bit & at all-time high. No investor concerns about data breach?
Powered by VIP.

Get every new post delivered to your Inbox.

Join 236 other followers