What does VIX tell us?
As we know the volatility index VIX is inversely correlated with the market performance – the higher the VIX, the lower the market. Currently VIX is at record lows and the question how long it could stay there is relevant to many investors. On the chart I have marked an interesting relation in the VIX - a cyclical patterns.
Some of my findings:
1. Spring months usually mark period of low volatility – around 150-160 days between two VIX peaks for the last 4 years
2. If VIX strikes above 25, the next peak is very likely to be around 310 days later
3. For the last year peak to trough duration took about 60-80 days. If that appears to be the case again we have already reached the lowest point, as the last peak was November 2016.
4. As it looks like the period lengths mentioned in points 1, 2 and 3 coincide somewhere late April- beginning of May, thus a rise in the volatility (market correction) is very likely. ( Some call it "sell in May and go away")
Best,
CH
Some of my findings:
1. Spring months usually mark period of low volatility – around 150-160 days between two VIX peaks for the last 4 years
2. If VIX strikes above 25, the next peak is very likely to be around 310 days later
3. For the last year peak to trough duration took about 60-80 days. If that appears to be the case again we have already reached the lowest point, as the last peak was November 2016.
4. As it looks like the period lengths mentioned in points 1, 2 and 3 coincide somewhere late April- beginning of May, thus a rise in the volatility (market correction) is very likely. ( Some call it "sell in May and go away")
Best,
CH
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.