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Prepare for the Stock Market’s Volatility to Increase

Stock-Markets / Stock Markets 2018 Sep 19, 2018 - 11:03 AM GMT

By: Troy_Bombardia

Stock-Markets

As you probably know, volatility has been notably absent from the U.S. stock market over the past 3-4 months. The S&P 500 has been rising in a slow and steady pace while VIX has been falling.


The S&P 500 has gone 75 consecutive days without a >1% daily gain. Here’s what happens next to the S&P (historically).

As you can see, this isn’t necessarily bearish for the U.S. stock market, even though the # of positive cases do start to fall after 6 months.

But here’s the more interesting point I want to show you. Look at the historical cases from 1990-present (when we have $VIX data)

These marked important long term bottoms in VIX. VIX tends to rise significantly over the next 6 months when the stock market’s volatility is very low (i.e. right now).

The S&P 500 has gone 75 consecutive days without a >1% daily gain. Here’s what happens next to VIX (historically)

This is a medium term bullish sign for VIX.

Click here for more market studies

By Troy Bombardia

BullMarkets.co

I’m Troy Bombardia, the author behind BullMarkets.co. I used to run a hedge fund, but closed it due to a major health scare. I am now enjoying life and simply investing/trading my own account. I focus on long term performance and ignore short term performance.

Copyright 2018 © Troy Bombardia - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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