Markets continue to be rather volatile, but are people pricing in too much fear?

Below is just a quick comparison between this sell-off and the one we saw earlier this year in February. S&P 500 sold off by approx. 11.5% in 7 days back then and all in a rather violent fashion.

This time around the S&P is down approx. 11% in 17 ish days, i.e. not as violently.

Back in February the VIX spiked to 35 very quickly. This time the VIX spike has been big but not as violent. The speed of the move was more violent in February, but also note how correlations during the recent sell-off started at much lower levels and have shot up much less than during the February sell-off.

It is not only important where the market is heading, but how it moves in terms of pace, which in turn is partly determined by how correlated stocks and sectors are.

Source: Bloomberg