Expect The Volatility Index VIX To Remain At Elevated Levels

We’re making history all over the place, and that includes the VIX (^VIX) as well. Notice at around 2PM Thursday, the VIX broke out of all-time resistance and proceeded to spike, hitting a high of 64.92. The amount of fear is incredible and will remain elevated for sometime. Given the global situation and the unknown duration of this crisis, I’m not sure if the VIX will ever see 30 or below again unless the crisis shows signs of subsiding. This will not happen anytime soon so expect the VIX to remain at elevated levels.

VIX - 1-day

I profiled the VIX while it was in its only consolidation level in 5 years. The next day, the VIX broke out 30%+. The short-term end to this spike will be signaled by either 1) a bearish gap up, 2) a large bearish engulfing pattern, or 3) a doji top (presumably long-legged). This will also mark the short-term, capitulated bottom in the stock market.

VIX - Year-to-Date

Notice how we’ve made all-time highs since the VIX was created. We’ve exceed fear levels in every major market crash/economic crisis. This just shows you how scared people are, and they have every right to be.

VIX - Since Inception

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