VIX Signal Ringing for First Time In Years

The VIX racked up its largest January-to-mid-April lead in at least a decade, hitting a five-month high

Apr 18, 2017 at 10:33 AM
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Last week, we noted that the CBOE Volatility Index (VIX) was sitting on its second-largest year-to-date percentage gain for this point in the year, going back 10 years. As of yesterday's five-month high of 16.28, however, the VIX had topped its 2014 high-water mark, racking up its largest January-to-mid-April gain in at least a decade, up nearly 16%, according to Schaeffer's Quantitative Analyst Chris Prybal. For comparison, the S&P 500 Index (SPX) sports a relatively mediocre year-to-date lead of roughly 5%.


cboe volatility index vix chart 10 years

sp 500 index spx chart 10 years

Most years, the market's "fear gauge" was negative through mid-April, and Prybal notes that, "Over the past 10 years, volatility has tended to spike later in the year, as opposed to the first half -- apart from 2010." At last check, the VIX is trading at 15.10 -- back below resistance in the 16.05 area, which is one-half of 2016's intraday high, but still above the key 14 level -- trimming that year-to-date lead to roughly 7.5%. 

The VIX will continue to be in focus in the short term, however. As Schaeffer's Senior V.P. of Research Todd Salamone noted in this week's Monday Morning Outlook, "With the standard expiration of options [on Wednesday], this week could prove pivotal as to where volatility heads in the near term." What's more, the start of earnings season and escalating geopolitical concerns, not to mention a highly anticipated French election this weekend, could also move the CBOE Volatility Index.
 

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