Study: what happens next to stocks when VIX falls below 14

[Troy Bombardia]

This is the first time VIX has fallen below 14 in more than 3 months.

Historically, this means that:

1. There's a 50-50 chance the stock market will face some downside in the short term. This downside risk is limited.
2. The stock market always rallies in the next 6-12 months

https://bullmarkets.co/study-what-happens-to-the-stock-market-when-vix-closes-below-14/

 

[ktm]

1. There's a 50-50 chance the stock market will face some downside in the short term. This downside risk is limited.

LOL.

 

[El OchoCinco]

 

[globalarbtrader]

This is the first time VIX has fallen below 14 in more than 3 months.

Historically, this means that:

1. There's a 50-50 chance the stock market will face some downside in the short term. This downside risk is limited.
2. The stock market always rallies in the next 6-12 months

https://bullmarkets.co/study-what-happens-to-the-stock-market-when-vix-closes-below-14/

7 data points isn't a study. It's a list of anecdotes.

GAT

 

[Scataphagos]

What a "sustained low VIX" actually means is that the market will behave in an irrationally bullish manner.... we should trade accordingly. But is "14" the line in the sand? Maybe.

 

[globalarbtrader]

Heres one I did earlier

https://qoppac.blogspot.co.uk/2017/05/people-are-worried-about-vix.html

GAT

 

[Saltynuts]

LOLOL, asesome.

 

[Saltynuts]

awesome even!

 

[Aero73kgp]

This is the first time VIX has fallen below 14 in more than 3 months.

Historically, this means that:

1. There's a 50-50 chance the stock market will face some downside in the short term. This downside risk is limited.
2. The stock market always rallies in the next 6-12 months

https://bullmarkets.co/study-what-happens-to-the-stock-market-when-vix-closes-below-14/

Now throw the following in ........................ Vix made lowest low in its history, triple bottom on monthly, neckline busted in 2008, now pierced in Feb 2018, downtrendline from 2008 punctured real good (but no close over it yet), monthly momentum warning lights are flashing = the ship is half submerged but the band plays on, hardly anyone has noticed the rogue wave approaching. I left Dodge already.

 

[Aero73kgp]

This is the first time VIX has fallen below 14 in more than 3 months.

Historically, this means that:

1. There's a 50-50 chance the stock market will face some downside in the short term. This downside risk is limited.
2. The stock market always rallies in the next 6-12 months

https://bullmarkets.co/study-what-happens-to-the-stock-market-when-vix-closes-below-14/

Vix target = 109 starting from the low of 8.56. The rocket fuel of choice for this blast? High octane Complacency.