Volatility Back Near All-Time Lows as Fed Discusses Policy

running moneyIn a sign that investors expect absolutely nothing to stem from the Fed’s two-day meeting this week, volatility plunged back near all-time lows on Tuesday.

CNN’s Fear & Greed Index also hit a reading of 84, indicating “Extreme Greed.” The index looks at seven different indicators to determine current market sentiment, including stock price action, put/call ratio, junk bond demand, and the current VIX reading.

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Speaking of the VIX, most traders’ favorite measure of volatility was trading at the session lows on Tuesday afternoon. As the Federal Reserve meets today and tomorrow, such a low reading on the VIX indicates zero prevailing fear that the Fed will make any changes to current policy.

The iPath S&P 500 VIX Short Term Futures TM ETN (NYSE:VXX) fell $0.05 (-0.50%) to $11.06 per share in Tuesday afternoon trading. VXX, which offers investors a way to bet on increasing volatility without using options, has fallen nearly 45% year-to-date.

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