After a big jump, the VIX is always lower one month later: Sentimentrader

Joseph Adinolfi, Marketwatch
December 19, 2024 at 12:00 AM UTC

Recently, SentimenTrader's senior analyst Jason Goepfert highlighted in his tweet that volatility tends to subside following sharp spikes, with historical analysis showing the VIX usually declines within a month after a 50% single-session jump.

But fortunately for investors, volatility rarely persists after a big spike like this. Jason Goepfert from Sentimentrader performed the historical analysis, and found that every time the VIX jumped by 50% or more in a single session, Wall Street's "fear gauge" was lower one month later. Many investors probably remember how quickly the VIX retreated after spiking to its highest level in four years on Aug. 5.