The market’s “fear gauge,” the Volatility Index (VIX), has been in a downtrend decline since October, when it was above 45. It sits below 18 last week as reported in our closing bell video presentation.

The stock market has priced in the Greece Crisis and US ZIRP (zero interest rate policy) until 2014. The market is getting complacent and investors are getting greedy. Despite how much the market thinks it knows, it can always be shocked by a low-probability event, or a “black swan,” as fund manager and author Nassim Taleb calls it. You never know what will cause volatility' But you can know something will cause it.

Be ready for a huge market sell off whenever the market reaches the special number 15-16 and then we are due for a market correction. Back in October 2011, the numbers were 46-48 and it felt like investors are in middle of a war. But now the battlefield is like a ballroom and investors are comfortable with their fears at these low number

As the market was digesting the financial crisis of 2007 and 2008, the VIX was bouncing between 17 and 25 (a low reading, considering the severity of the issues). Mortgage companies were failing. Bear Stearns received its first bailout' The bad news was “priced in,” or so everyone thought' Then in September 2008, Lehman Brothers collapsed. It was a black swan. From August 18 to October 20, 2008, the VIX more than quadrupled from 18 to 80.

So, be need to be ready for a return of high volatility !