In This Article:
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.
The S&P 500 has given a 17.9% median return each time the CBOE Volatility Index has fallen from over 50 to the 30 level. Analysts highlight historical trends showing how volatility cycles lead to advances in the S&P 500 index.
What Happened: According to Jason Goepfert, a consultant at White Oak Consultancy LLC, each time the fear index, VIX, goes through a cycle of being above 50 to falling to the 30 level, the S&P 500 index logs in 100% of positive gains by the end of that year.
According to the data highlighted by Goepfert, during the most recent VIX cycle of 50-to-30 in May 2020, the S&P 500 returned 42.96% after one year.
Don't Miss:
-
Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Last Chance to get 4,000 of its pre-IPO shares for just $0.26/share!
-
Hasbro, MGM, and Skechers trust this AI marketing firm — invest pre-IPO from $0.60 per share.
He highlighted data from similar such cycles from 2009, 2002, and 1988. However, historically, the S&P 500 logs a 0.7% median loss after the first week on ending the said 50-to-30 VIX cycle.
Meanwhile, Charlie Bilello of Creative Planning highlighted in his X post how the S&P 500 has reacted after VIX has closed above 50 since 1990.
On average, whenever the VIX has closed above 50, the S&P 500 has returned 35% over one year and 129% over the next five years.