Volatility and the FTSE-100

We have previously looked the how low volatility can be a good "contrarian" indicator where low volatility suggests that investor sentiment may be too buoyant (When High Risk Can Mean Low Risk). 

Well the last couple of weeks we have seen volatility on the rise for the FTSE-100 as the widely watched UK Index declined. 

You may notice the almost mirror image - well if we overlay FTSE 100 with the Volatility Index (turned upside down) you can see the similarities and we will wait to see if the FTSE 100 follows volatilities lead.