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VIX Up 37%, SPX Flat: House Of Cards Or House Of Fear?

Published 02/10/2015, 11:30 PM
Updated 07/09/2023, 06:31 AM

VIX vs SPY 90 Day Performance

Do some investors think the market is a "House of Cards?" I say humbly that I don't know. It sure seems like something has them concerned, as fear levels remain lofty with the market making little progress up or down.

Over the past 90-days the S&P 500 is pretty much flat (up less than 1%). During that time the VIX (Fear Index) remains elevated, as it's been up the majority of the time the market has been going sideways.

90 Days of SPY Chop vs BIX Possible Breakout

The VIX looks to be creating a pennant pattern over the past few months. How this pattern resolves itself could point to which direction the SPDR S&P 500 (ARCA:SPY) heads out of this sideways chop.

VIX Returns After 40% Up Days, 90 Days Out

This table above highlights what happens to the VIX after it's up 40% in 90-days when SPY is positive. Majority of the time 90-days out the VIX is lower.

Falling fear can be positive for stocks and for VelocityShares Daily Inverse VIX (NASDAQ:XIV). If the VIX falls during the next 90-days, XIV could do fairly well. Let's see what happens from here.

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