Even the VIX tourists were paying attention to the long running streak where VIX closed over 20.00. The run ended at 30 today with VIX finishing at 19.54. This was not nearly as fun as watching Pete Rose in the summer of 1978, but for some of us, it was quite a ride. When Pete didn’t get a hit on August 1st he was asked what he would do tomorrow, his response, “I guess start another streak”. Unfortunately we can’t stick a microphone in front of VIX and ask what is next. However we can take a look at what was next for all the previous streaks. In preparation for the day that VIX closed under 20.00, I did just that, and the table shows up below.
Since most of us care mostly about the stock market, I took a look at what the S&P 500 did for 20, 40, 60, and 120 trading days post starting with the day that each streak ended. All VIX closing over 20.00 runs for 10 or more days show up on the table below. To show the lack of pattern, instances where the stock market moved higher are in green and when the market dropped I show the performance in red.
There’s not a consistent pattern here and that’s OK. Just because VIX is under 20.00 (for the moment) doesn’t necessarily mean the stock market is out of the woods yet. At least not based on history. Time will tell if today’s close signals a new bull run or just a hiccup on a move to the downside.