The chart below is a full year-ahead forecast for the CBOE Volatility Index, also known as the VIX Index.
The index represents a 30-day forward-looking expectation for U.S. stock market volatility and is specifically based on the S&P 500 Index.
When the VIX “spikes” it often indicates a panic bottom in the market is approaching.
When the VIX reading is low, it is often said the market is complacent, or “greedy”. Important note: Just because the VIX is producing a low reading does not mean the market will then fall. The VIX can remain subdued for months at a time.
To best way interpret the forecast below: When the VIX is scheduled to print a low reading, it is time to pay closer attention to market mechanics and exercise stricter risk management measures.
According to the forecast, the VIX is scheduled to spike a few more times this year, indicating potential significant buying opportunities.
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