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|Subject: a jason goepfert (bullish) stat||Date: 4/11/2012 1:22 AM|
|Author: grier22||Number: 44562 of 44586|
FWIW, courtesy WSJ. Jason vs Hussman's Aunt Minnies..
The VIX is up again today, rising 2.6% to 19.29, and is up more than 20% since the end of March. It has never had an eight-day consecutive streak of gains.
While stocks have stumbled, traders have been pricing in a higher likelihood of more volatility, Goepfert says.
But the market’s returns following previous streaks may surprise a few folks. There have been nine instances since 1990 in which the VIX rose for seven straight session. Almost all of them occurred when volatility was climbing from multi-month lows.
“Historically that’s been a good sign for stocks, and a bad one for volatility… Far from signaling a return to high-volatility conditions, by two weeks later the VIX was lower every time…Because there is such a strong inverse relationship between volatility and stock prices, the declining volatility over the next two weeks usually resulted in rising stock prices. The S&P 500 was higher two weeks later eight of the nine times, and performed well beyond random returns across all time frames up to three months later.”
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