This came from Fundstrat’s Tom Lee. I love his pieces on CNBC since he is very technical and evidence-based.
What he says is that if the VIX falls below 20, this “would be a major risk-on signal, as it would suggest that investors see lower volatility in the coming months”.
A potential collapse in the VIX would signal further upside ahead for the equities (ie. stock market goes up).
I actually created an app that helps me track the Dow, S&P 500, Nasdaq 100, Russell 2000 and the VIX from my phone (or anywhere, it’s a web application). It also does a lot more but that’s out of scope for this article.
If we get anywhere near 20 I will be commenting here / posting in our Facebook Group.
If you’re not already a member you should join. Just saying 🙂