Quote from: FXOpen Trader on February 15, 2021, 10:52:32 AM

Equity Indices Remain Bid as America Awaits New Fiscal Stimulus

Last week brought little or no movements on the financial markets. The VIX index, which measures volatility, dropped to levels not seen so far during the pandemic.

The lack of important economic data contributed to this environment. With a few exceptions, like the CPI or the inflation data in the United States, all other data was second- or third-tier. Effectively, it means that the focus was on the stock market’s price action. This week will likely be the same as it starts with a holiday (i.e., Presidents’ Day in the United States) and no important data until next Friday when the European PMIs are released.

click for more

There is a special index that measures the volatility of the entire broad market. In the investment community, it is known as the VIX or "fear index".

This index is calculated by the Chicago Board Options Exchange on option contracts for the S&P 500 Index. As a result, it reflects investors' expectations of possible volatility for the coming month. Simply put, the VIX index shows the level of fear investors have about the future of the market.

The VIX chart is like an inverted S&P 500 index. Consequently, when the market is rising, the fear index falls. But during periods when the market tends to go down, the fear level gets higher. Moreover, the faster and stronger the decline in the S&P 500, the stronger the rise in the VIX.

I haven't watched the latest news, but I think the "fear index" has reached unprecedented heights because of recent events.