1/8 Watchlist: Volatility's Decline; DTV, PEP, SMH, SPLS, UNG on the scan

Volatility (VIX) among blue chips has declined by 4.6% from the open today. Since the decline began on Jan. 4, the first trading day of the year, the index has declined by 15.2%. Fear, where is thy sting?

The VIX, also called the "fear index", measures volatility of the S&P 500 stocks. When the VIX is down, the theory goes, traders are less fearful of losing their money. Risk premiums shrink.

What that means for us is that it gets hard to make money in some respects. Option premiums are lower. Bid-ask spreads are narrower. I find fewer directional trades.

Risk is the trader's friend. Without risk there is no profit. Risk is the mother of success.

So, with less volatility, indicators across  the board are fairly quiet. No new signals. No big moves.