What a Fearless Squeeze!

Here’s another view to add to the bleak chorus doing the rounds of dalal steet these days. While the retail rats are sitting out of the game, traders and speculators havr it none too easy themselves. The market’s been on a steady contraction in volatility as seen by the falling Hi-Lo range of the NIFTY ever since the day it peaked towards end 2007. The 50 day moing average of the Hi-Lo range of the NIFTY shows a clear secular downtrend. Less scope for day traders to play in.

Consequently, the fear index on the NIFTY itself has been falling rapidly since the date data is available. While the VIX is poised to reach its lowest levels ever, there isn’t anything positive in the newsroom to suggest a surge. Maybe the VIX will continue to fall below 15? It’s lowest reading was on 6Sep’10 (15.22) and the friday reading of 15.73 is in striking distance! The market had jumped up 13% in the two months following 6Sep’10.

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