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Strategies & Market Trends : Longer-Term Market Trends

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From: ~digs	4/16/2013 11:38:12 PM
	6 Recommendations Read Replies (2) of 3209

The VIX "fear gauge" rose more than 43% on Monday, one of the largest one-day gains in 27 years. Historically that has led to a very short-term rebound, but more selling pressure after that. This was the 8th-largest one-day increase in history, dating back to 1986. The table below lists every other time that the VIX gained more than a third of its value in a single session. Even though Monday was the 8th-largest rise in history, it was coming off the 3rd-lowest reading in the table. Of the 7 other times the VIX jumped more than 33% when it had been below 20, the S&P rose the next day every time, then faltered every time but once in the following weeks. Also concerning is that the S&P tended to struggle in the weeks following those instances when the big rise in fear occurred with a relatively small decline in the S&P. When the S&P had dropped less than -4% on a day the VIX rose more than 33%, the S&P declined over the next two weeks 5 out of 7 times, and one of the positive instances fell apart right after that. stocktradingtogo.com

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