The stock market concern indicator fell below a key point on Tuesday, suggesting an additional increase for stocks.
The CBOE volatility index, also known as VIX, fell below point 20 to its lowest point since the start of the COVID-19 pandemic. A VIX below 20 is seen as a sign that the inventory market is moving from maximum to low volatility. volatility one, according to Katie Stockton of Fairlead Strategies.
And according to Tom Lee of Fundstrat, a fall below 20 of the VIX indicates a difficult environment that would cause budget flows to stocks from the systematic and quantitative investment budget.
But the VIX has starred in several fake heads in recent months, soon falling below 20 before in February, November and August.
That’s why Stockton recommends that investors wait for confirmation of a VIX outage before making portfolio changes, such as cutting market coverage. Confirmation of a VIX outage would require consecutive closures under point 20, according to a Note from Stockton Tuesday.
“This would mark a potentially bullish replacement in sentiment and a shift from a high volatility regime to a low volatility regime, last noticed before Covid with new ground for the VIX close to 11,” Stockton said, adding that a rupture of the VIX “would be a short-term upward follow-up to the S