Volatility – Return vs. VIX

Volatility – Return vs. VIX While a higher VIX indicates increased market uncertainty, it can also present opportunities for investors to achieve better average returns by strategically navigating the volatility. Image: Alpine Macro

S&P 500 and 3-Month VIX Relative to VIX (VIX3M/VIX)

S&P 500 and 3-Month VIX Relative to VIX (VIX3M/VIX) The 3-month VIX relative to the VIX closing at an oversold level below 1 is a potentially significant indicator of market sentiment. This can be interpreted as a sign of capitulation and possibly a contrarian bullish signal. Image: BofA Global Research

VIX Average Trend in U.S. Election Years

VIX Average Trend in U.S. Election Years Historical patterns suggest that the VIX tends to bottom out in mid to late August, followed by a trend of increasing volatility as the U.S. Election Day approaches, driven by heightened market uncertainty. Image: BofA Global Research

VIX vs. S&P 500

VIX vs. S&P 500 The lack of a significant increase in the VIX during the market decline may indicate that widespread panic selling is absent. Image: Real Investment Advice

U.S. High Yield Credit Spreads vs. VIX

U.S. High Yield Credit Spreads vs. VIX Low high-yield credit spreads and a low VIX may suggest market positivity, but the lack of fear or volatility can paradoxically create a sense of complacency among investors, causing them to overlook potential risks. Image: Topdown Charts

Sentiment/VIX Composite vs. S&P 500

Sentiment/VIX Composite vs. S&P 500 Current levels of the Sentiment/VIX Composite Index are more indicative of near-term market peaks than the beginning of a bullish trend. Image: Real Investment Advice

Volatility Divergence – VIX vs. MOVE

Volatility Divergence – VIX vs. MOVE The divergence between VIX and MOVE presents unique challenges and opportunities for market participants, reflecting different expectations and perceptions of risk in the equity and bond markets. Image: BofA Global Research

Sentiment/VIX Composite vs. Fed Funds

Sentiment/VIX Composite vs. Fed Funds During a rate hiking campaign, bullish sentiment tends to increase initially, but ultimately ends badly. Image: Real Investment Advice

VIX and Geopolitical Risk Index

VIX and Geopolitical Risk Index The VIX tends to be sensitive to geopolitical events and can serve as an indicator of market sentiment during times of heightened geopolitical risk. Image: Goldman Sachs Global Investment Research

Valuation – S&P 500 P/E to VIX Ratio

Valuation – S&P 500 P/E to VIX Ratio When the S&P 500 valuation-to-volatility ratio is high, it suggests investors pay more for perceived market safety, indicating potential overvaluation and increased market vulnerability to downturns. Image: Real Investment Advice