The graph explains why the fall of the May stock market is not comparable to that of December

There is a key measure of stock market volatility that shows why this month's sale was different than in December.

The CBOE Volatility Index, or VIX, is sometimes referred to as the "Fever Gauge". The VIX measures Wall Street's expectations of significant movements in the stock market over the coming months by badyzing the prices of S & P 500 options.

The VIX is near 18:50 on Friday, close to its 200-day moving average of 16.98. But despite falling more than 6% from the S & P 500 index this month, the VIX index has hardly budged. It peaked at 23:38 in May, well below the peak of 36.20 reached in December, when the S & P 500 lost 9.2%.

If this is the criterion of fear, why is there not as much fear as in December, considering that there are undoubtedly more issues of concern in a trade battle getting ready with not only China, but Mexico now?

On the one hand, investors are firmly convinced that the Federal Reserve will intervene and reduce rates, possibly several times this year, if stocks continue to fall.

Investors had not been so rebadured in December, a sale that occurred just after a Fed rate hike. Since then, Fed officials have taken a more flexible and flexible stance on rates. And now, the market is predicting, they will probably cut this year.

Larry McDonald of ACG Analytics says that the fear is still there, it's just that people are making a different type of bet on the VIX. He looks at how investors trade 2-month VIX futures versus 8-month VIX futures. The fact that the two VIX futures are trading at roughly the same price is a sign that the decline is not over, he said.

"When you get 5% off the highs, you should not have such a flat VIX curve," McDonald said. "What this tells you is that although the sale is orderly, there is something important that is hiding here."

Investors buy VIX futures at 2 months as a way to "buy protection," McDonald said. This is a practice that hedge funds usually use when they anticipate a downturn.

"Before the big bazaar, what happens in every major home is that capital arrives in safe places," McDonald said.

The way in which investors are turning to defensive stocks, such as consumer staples, is representative of this change. According to McDonald, "staple goods are really on the road" and outperform consumer discretionary stocks. The technology sector has also shown similar defensive movements, as "there is also a conversion of semiconductors into software," McDonald said.