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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."

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Matt Egan
Matt Egan
Staff Writer, CNNMoney

Matt Egan is a staff writer for CNNMoney’s markets and investing section. He covers Wall Street, hedge funds, geopolitics, emerging markets, M&A moves and cyber security. He previously worked as a senior reporter at Follow him on Twitter @MattMEgan5

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