Monday, January 10, 2011

VIX to Range From 16 and Low 20s Says Goldman (NYSE:GS)

Commenting on the VIX, Goldman Sachs (NYSE:GS) said they see it operating in a range from 16 to the low 20s for 2011.

The reasoning behind the performance of the VIX, which is the benchmark index for U.S. stock options, is the assumption equities will continue to rise, producing a resultant reduction in volatility.

Goldman Sachs said, “As growth rebounds and manufacturing data improve, equity typically rallies and equity volatility declines. The combination of stronger growth, moderate inflation and accommodative monetary policy should be a beneficial environment for risky assets and lower realized volatility.”

Stocks in the U.S. have risen for six weeks in a row.

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