VIX Spike Often Followed By Quick Market Bounce

While the SPX declined sharply on Monday, the VIX index rose sharply. In fact, the VIX closed nearly 30% above its 10-day moving average. A stretched VIX is often a sign of an overly fearful market. It will often be followed a strong reversal. The study below is from last night’s Subscriber Letter. It exemplifies this.

2018-06-26

Very impressive consistency. Quick bounces seem to have been the norm under these circumstances. Traders may want to keep this in mind over the next few days.

 

 

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