Epic 34% spike in the VIX Monday.

The 1oth largest daily percent increase since 1990 and biggest since August 2011, which, at the time was in the midst of a nasty correction/mini bear market.   The S&P500 is only off just under 3 percent from its recent highs made last week.

The following table show the post S&P500 returns after large VIX spikes.

Upshot?  Patience.




(click here if table is not observable)

Category: Technical Analysis, Trading

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

3 Responses to “VIX Spikes and the S&P500”

  1. Iamthe50percent says:

    I’ll try to be patient as I know that you know what you are talking about. After this storm, I will change my 401K mix from 100% stocks to 75% although I am convinced that the bond trend has to be down and for probably the rest of my life (13 to 20 years). I apologize for my despair yesterday.

  2. WolfStreet says:

    The long-term trend is up. It just happens that the S&P500 reached the upper line of its ascending channel, which makes for a short-term correction. It just needs to reach its lower line, maybe somewhere around 1430, before resuming its move upward.

    In short : no panic here.(yet!)

  3. paststat says:

    Yesterday was the fifth largest VIX spike and during the prev 20 large VIX spikes VIX has fallen 75% (15/25) of the times next day , with the average fall standing at -6.06% , while S&P 500 Index has risen 70% ( 14/20) of the times the next day, with the average gain standing at 9.2 points or 0.8% , for more details http://paststat.com/blog/20-largest-vix-spikes-and-next-day-vix-and-sp-500-index-returns/