Excerpt from Business Insider quoting DataTrek co-founder Nick Colas:
…. “Chances that the stock market has found its bottom appear unlikely based on the current measurement of Wall Street’s closely followed fear gauge, also known as the CBOE Volatility Index.
That’s according to DataTrek co-founder Nicholas Colas, who highlighted in a Thursday note that the VIX’s current reading of about 26 is too low to suggest a tradeable bottom is in, based on historical market data.
Indeed, Tuesday’s more than 4% decline in the S&P 500 led to a 14% surge in the VIX to 27, which is one point below a one-standard-deviation move from its long-term average of about 20.
According to Colas, it’s telling that the VIX was unable to hit a one-standard-deviation level on the same day the S&P 500 registered a four-standard-deviation move”….
Full article here on Business Insider.