BI: “Here’s how the stock market’s fear gauge can signal whether a bubble is forming”By admin_45 in IN THE NEWS
Excerpt from Business Insider quoting DataTrek's Nick Colas:
.... "As tech stocks march to new all-time highs amid rising COVID-19 cases in the US, investors are questioning whether a speculative bubble in stocks may be forming.
Nicholas Colas, co-founder of DataTrek Research, said on Tuesday that investors can look at the level of the VIX, also known as the fear index, to determine if stocks are in a speculative bubble.
Colas highlighted that near the peak of the the dot-com bubble, the VIX had an average reading of 24.95, relative to its since-inception average reading of 19.8, according to historical data.
Colas said as long as the VIX trends lower to below the 20 level, the stock market is not in a bubble.
The VIX registered a reading of 24.46 on Tuesday, falling 70% from its peak of 80.85 in mid-March"....
Read the full article here on Business Insider!