This Week in Stock Market Volatility: Calm Waters

After surging 54% in late February, the S&P 500 Volatility Index (^VIX) has resumed its calm manner. Quiet before the storm?

This week the Dow Jones Industrial Average (NYSEARCA:DIA) hit an all-time high of 13,354 while the Nasdaq Composite Index (NYSEARCA:ONEQ) hit 12-year highs. Meanwhile, small cap (NYSEARCA:IWM) and technology stocks (NYSEARCA:QQQ) are back to trading near multi-year lows in volatility. 

The CBOE Russell 2000 Volatility Index (^RVX) has been trending lower and looks poised to challenge its 52-week low of 14.43 set in January. At 13.79, the CBOE NASDAQ-100 VOLATILITY ^VXN) is just shy of its 52-week low of 13.04.

Depressed volatility can be interpreted as too much complacency or lack of fear in the stock market. Although it's frequently used as contrarian sell signal, it's best used in conjunction with other key indicators.

The main message is still the same: A stock market without fear is a dangerous place to invest.

The ETF Profit Strategy Newsletter uses a common sense approach to fundamental and technical analysis to identify key inflection points and profit opportunities in ETFs tracking stocks, bonds, and commodities.

Listen to Ron's Weekly Podcast. Up this week: The Lesson Behind Apple's 40% Fall .