The VIX — often called the “fear gauge” — is sitting near its lowest point in a year. History shows that when volatility gets this low, it often doesn’t stay there for long. Low VIX means complacency, and complacency can give way to sudden spikes when the market turns.
I’m seeing a few signals worth noting:
Divergence in SPY: Price is making new highs, but the RSI isn’t keeping pace. That’s a classic divergence — often a caution flag.
Volume Drop-Off: While SPY’s been climbing steadily since April, trading volume has been fading. Rising markets with falling volume sometimes hint at a slowdown.
VXX Pitfalls: Buying VXX (or calls on it) when VIX is low can be tricky because of time decay and natural price erosion. Patience is key — spikes can be an opportunity for puts instead.
Right now, portfolio “insurance” is cheap. Whether that means hedging positions or simply being more selective, the data suggests this might be the time to prepare rather than chase.
#VIX #SP500 #MarketVolatility #OptionsTrading
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