VIX Sinks To Multi-Month Low In Downtrend
The VIX "fear gauge" has been steadily slinking lower, picking up its pace lately - nearly enough to close below its lower Bollinger Band. In the process, it has dropped to a multi-month low, even though the S&P 500 remains (barely) below its 200-day average.
That 200-day filter is important, because it's much more rare to see the VIX drop to this low of a level, absolutely and relatively, during generally downtrending markets. It has not been a good sign.
The tables below show every time the S&P was below its average and the VIX closed at a 3-month low, both when it was below 20 at the time, and when it was at any level. The times this triggered with the VIX below 20, the S&P's future returns were almost universally negative. This is a very, very mixed market.