Fear is Creeping Back into the Market

The VIX Index, a measure of volatility on the S&P 500, rose 2.2% to 25.30. This is a sign that September may look bleak and downright ugly.

Markets may be due for a pullback on fundamentals but it doesn't seem like we will see massive 7-10% drops in the index as we have in the past year. This is simply because there are still too many people with deep pockets sitting on the sidelines. They will take the opportunity to buy their way into the markets that will most likely cause a see sawing motion as profit takers also come into play.

After missing the past 40% rise in the indices, they won’t want to miss out. This will protect and provide a cushion that we haven’t seen for a while as risk has returned.

Written by Jae Jun. Jae is the author of Old School Value, a value investing blog that deals with stock analysis, business valuation and fundamental analysis.