S&P 500 Gain vs VIX





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Investor fear is elevated.

How do we know?

VIX, often referred to as the fear gauge is currently at a relatively high level.

So what does investor fear portend for the stock market?

Today’s chart helps answer that question by presenting seven VIX ranges versus the ensuing average S&P 500 12-month gain.

Conclusion…

The stock market has, on average, performed better following a relatively high VIX reading.

Currently, VIX comes in at a touch above 30 — a level often followed by above average stock market performance.

A caveat — VIX can go significantly higher than 30.

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S&P 500 Gain vs VIX

What is VIX?

The CBOE VIX is an index that quantifies 30-day forward S&P 500 volatility expectations.

What does the VIX tell us?

VIX, often referred to as the fear gauge, tracks expected S&P 500 volatility. As it so happens, VIX tends to rise when the S&P 500 is declining and investors are fearful.

What is a normal VIX?

Since 1990, the VIX has been below 20 (signifying investor complacency) approximately 62% of the time.

Can I buy the VIX?

Yes. There are several ETFs that track the VIX. The largest VIX ETF/ETN is the iPath S&P 500 VIX Short Term Futures ETN (VXX).