Thursday we again saw the VIX and VXO close well below their recent mean. Such stretches suggest a collapse in fear has taken place among investors. The study below looks for stretches of 15% or more below the 10-day moving average that have persisted for three days.

Based on the stats table there appears to be a downside inclination. I find the note at the bottom of the study to be especially interesting. Nearly every case has experienced an almost immediate pullback, but those that didn’t went without pulling back for a long time.