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Dow's Low Volatility Streak Continues

The stock market’s midday rise has moved the Dow back into positive territory for the day. With a gain today, the Dow would avoid its first 3-day losing streak since the third week of January.

Although the Dow flirted with a triple-digit decline (down 1 percent) late in the afternoon yesterday, it finished off the lows, ending the day down just 0.66% - still its worst day in 1.5 months. But amazingly, yesterday’s decline was just the 10th down session for the Dow since the Presidents’ Day holiday in February (a period stretching 36 trading sessions). And what a steady rise it has been: the Dow has risen about 8% during that period.

Despite the hint of weakness yesterday, market volatility remains quite low. Remarkably, the Dow hasn't moved more than 1% in a day for over a month now, extending into today’s trading. Quite a contrast to the roller-coaster markets traders had to stomach last year around this time…in March 2009, the Dow had swings of 1% or more on all but 5 days.

A similar stretch of significantly low volatility hasn’t been seen in over 3 years now. The last time a notable streak of low volatility occurred was back November 28, 2006-February 26, 2007, when the Dow went 60 straight sessions without a daily change of 1% or more.

Also of note this time around, the CBOE Volatility Index remains well below 20, hovering between the narrow range of 16-18 for well over a month now.

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