Chris Preston: All is quiet on Wall Street right now. Too quiet.
Stocks have scarcely budged in the last four trading days, a product of historically low volatility.
The S&P 500 is down seven points, or a mere 0.33%, since last Thursday.
Volatility, as measured by the VIX, is just off its lowest point since 2007.
Year-to-date, the volatility index has fallen 20%. The last time the VIX was this low, it doubled within six months.
Of course, those were different times. In 2007, we were on the cusp of a global recession.
Fortunately, another recession does not appear imminent.
The tight trading range could be more of a concern than the historically low volatility.
Friday and Monday were two of the four least volatile trading sessions of the last 20 years, with intraday trading ranges of 0.25%.
It had been 1,787 days, or seven years, since such a narrow intraday range had occurred.
Now it’s happened twice in the last week.
Meanwhile, it has been 46 days since the S&P 500 has budged as much as 1%, the longest streak since 2006.
When stocks trade in a narrow range for an extended period, a huge breakout usually follows.