Everyone is talking about the VIX — the so-called fear indicator — and how it’s dropping to near record lows, signaling a high degree of complacency in the market.
This is taken as evidence that by some as evidence that the market is due for a big drop. And that may be the case.
But we wondered, does a low VIX count as a complacency measure if everyone is talking about it non-stop.
We don’t know the answer, but we did make this chart showing a pretty clear relationship between the VIX and mentions of the word VIX in news articles.
Photo: Eric Platt/Business Insider, Data: Bloomberg
And as you can see, lately there’s been a spike in VIX mentions (red line) while the VIX itself (the blue line) continues to go down.
The lines are noisy, so this isn’t totally weird, but generally the two lines match each other, so at some point they’ll probably converge.