All I want for Christmas is… low volatility?

December 23, 2016

The month of December sees some of the lowest volume trade days of the year. People are on vacation, holiday parties are in full swing and allocations for the next year are being finalized. S&P 500 volatility has also decided it wants to take a step back from the roller coaster of the year. VIX futures hit a 16 month low on Wednesday to 10.97, a level not seen since August of 2015.

The VIX had sharp increase in volatility leading up to the election, post-election it has been on a sharp decline following the announcement that Trump beat Clinton.

vix-price-12-22-2016

With the S&P 500 trading almost flat for the week as of market close on December 22nd  and today shaping up to be another non eventful day, all eyes will be looking to the markets next week. In the next week we will see the final tax loss trades of the Obama Presidency and we may even see the Dow Jones finally break through 20,000.
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