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Low VIX a Warning for Market: Strategist

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, slipped to a 6-month low this week and is down more than 20 percent since May. What does this mean for stocks and how should investors position their portfolios?

Tim Freeman, head of U.S. equity derivative sales at Capstone Global Markets, shared his insights.

“The VIX is going to be comprised of what realized volatility is, and what immediate fears in the marketplaces are—and that has collapsed,” Freeman told CNBC.

“People have thrown in the towel and are not going to fight the Fed anymore. That’s clear.”

However, Freeman cautioned that in the longer term, volatility signals that the markets are “very concerned” about structural, sovereign and debt issues going forward.

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Scorecard—What He Said:

  • Freeman's Previous Appearance on CNBC (Oct. 29, 2010)

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More Market Insights—Read and Judge:

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CNBC Data Pages:

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CNBC Slideshows:

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Friday's Top Dow Gainers (as of this writing):

Bank of America

JPMorgan Chase

Alcoa

General Electric*

Boeing

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Disclosures:

No immediate information was available for Freeman or his firm.

*GE is the parent company of CNBC and CNBC.com.

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Disclaimer

Symbol
Price
 
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%Change
AA
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BAC
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GE
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JPM MLP ETN
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VIX
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BA
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