VIX Volatility and SPX S&P 500 Weekly Charts; VIX Prints Lowest Price in Over 3 Years; SPX Prints Highs of 2023 Near 4300

The VIX prints the lowest price in over 3 years. Traders and investors are relaxed and complacent expecting the stock market to continue higher. Volatility spiked in early 2020 due to the COVID-19 pandemic so stocks went into freefall. The panic and fear was off the charts with VIX pegging 85+ so professional traders were buying, running into the burning building, while Joe Sixpack and Jane Retail were running away with their hair on fire swearing they will never own a stock again.

The rally continues through 2020 and 2021 and the VIX drops back down teasing the lows from early 2020. This marked the epic top in the US stock market above 4800 as 2022 started. The cyclical bear market ran through 2022 turning into choppy sideways slop for 2023. Note the choppy trading last year with the peaks and valleys in the stock market identified inversely by the complacency and panic in the VIX. Note that a VIX above 30 is enough fear and panic to create the rallies over the last year.

The purple stars are an odd lot. Keystone likes purple crayons because they taste like grapes. Stocks rally from early 2020, during the pandemic, to the top in late 2021 early 2022. With stocks higher, you expect a lower VIX than late 2019 early 2020 but it never came down for a lower low. That was a clue that the stock market was weak despite the bullish euphoria in late 2021. Sure enough, stocks roll over into the cyclical bear for 2022.

For the purple stars from mid-2021 to present, the VIX does print a lower low so the expectation is that stocks would be at a higher high. Not even close. The SPX is at a closing high for this year but nowhere near the 4800+ record high. This tells you that something is not quite right.

Comparing the purple stars from early 2020 to present, the stock market is higher but again, the VIX is not yet at a lower low than late 2019 early 2020.

The VIX is a beachball that you are holding underwater to make sure stocks go higher if you are long. But once in a while your hand slips and the VIX explodes up out of the water sinking your long plays. Once the VIX beachball is wrestled back under control (by the corrupt Federal Reserve in the crony capitalism system) and pulled back underwater, stocks become buoyant again. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.