The recent VIX break below 18 (below 17) has been associated with substantial pullbacks over the past 3 years. Note the Blue circles correspond to VIX lows, while the Red are VIX highs. The Yellow circles were below 18.

Nasdaq versus VIX, 3 Years (weekly) click for biiger view
Nazz VIX weekly
Source: ILX

Nasdaq versus VIX, 6 months (Daily) click for biiger view
Nazz VIX comp

There remains a voracious institutional appetite for stocks, and that may very well temper the downside of any correction.

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Quote of the day: “Our instinctive emotions are those that we have inherited from a much more dangerous world, and contain, therefore, a larger portion of fear than they should.”
-Bertrand Russell

Category: Finance

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