The VXO fell over 15% on Tuesday – a fairly rare occurrence, especially when the S&P 500 is moving off a 50-day low. Below I took a look at how the S&P has performed following such instances:
Notable above is that only 1 of 10 instances saw the S&P rise the next day. Not shown in the chart is that the lone day 1 winner closed lower than the entry on day 3 – meaning there was a short-term pullback in every case. Instances are a bit low in this study but notable and quite suggestive nonetheless.