US Stock Market Volatility High as Prices Correct Lower

US stock market volatility analysis:

• Volatility in Wall Street stocks remains close to its highest level since late January as risk aversion sends prices lower in heavy trade.
• The VIX volatility index remains close to the 20 level after rising above 21 on Tuesday.

S&P 500 volatility elevated

The VIX index, which measures the volatility of the S&P 500 index of Wall Street stock prices, jumped to its highest level since late January on Tuesday and is still only just below its highs as concern about the US-China trade talks prompts a flight from high-risk stocks to the relative safety of gold and US Treasury notes and bonds.

VIX Price Chart, (April 8 – May 7, 2019)

Source: CBOE (you can click on it for a larger image)

The index, which is calculated by the CBOE using the prices of S&P 500 call and put options – and is known as the markets’ “fear gauge” – has jumped in recent days as traders have bailed out of the stock market. Moreover, volume has been high on the downside – a negative signal for prices.

S&P 500 (SPX) Price Chart, Daily Timeframe (February 1 – May 8, 2019)

Chart by IG (You can click on it for a larger image)

More to read:

A guide to the S&P 500 VIX index

How to measure volatility

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— Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex