The odds of another spike in the VIX are growingOn Friday, the Volatility S&P 500 Index reached new lows unseen since January 2020. What is intriguing about this situation is that new lows in the value of the VIX tended to be followed by a subsequent spike in the index and weakness in the U.S. stock market (over the past year or so). Considering that the recovery of the Chinese stock market is starting to show signs of stagnation, with the Shanghai Composite Index and Hang Seng Index moving increasingly sideways, we are again on high alert. The odds of stock market reversal and spike in the VIX are growing.
Illustration 1.01
Illustration 1.01 displays the daily chart of the Shanghai Composite Index, Hang Seng Index, and S&P 500 Index.
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DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for an individual investor to take any trade action. Therefore, your own due diligence is highly advised before entering a trade.