Moves in the Fear Gauge Look Good for U.S. Stocks, Sundial Says
This article is for subscribers only.
The moves in the Cboe Volatility Index are looking positive for U.S. stocks right now, according to Sundial Capital Research Inc.
On Friday, the S&P 500 fell 2.4%, but the VIX rose only 7.8%, a relatively small gain in the volatility gauge given the outsized move in stocks. When the S&P first starts to drop, even a decline of 1.5% or so can lead to a jump of 20% or more in the VIX, Sundial’s Jason Goepfert wrote in a note June 27, citing his colleague Troy Bombardia. As corrections or bear markets continue, large tumbles in the equity gauge elicit relatively smaller increases in the VIX, he said.