VIX ‘fear gauge’ ends at lowest level in nearly a year

VIX ‘fear gauge’ ends at lowest level in nearly a year

The Cboe Volatility Index, known as Wall Street’s “fear gauge,” ended below 20 for the first time in nearly a year on Friday.

The VIX fell 1.28 points to end at 19.97. It had not closed below 20 – near its long-term average – since Feb. 21, 2020, shortly before the coronavirus pandemic roiled U.S. stocks.

In March 2020, as the benchmark S&P 500 tumbled more than 30% from its most recent high, the VIX shot up to a record closing level of 82.69. The fear gauge remained well above its usual levels for months afterward. Even as U.S. stocks recouped their losses and posted fresh record highs, it remained elevated.

The VIX spent 246 consecutive sessions above 20, according to Refinitiv data, its longest such streak since the financial crisis. The index spent 331 sessions above that level between August 2008 and December 2009.

The VIX’s descent in spite of subdued movement in U.S. stocks this week bodes well for future performance, said Thomas Lee, managing partner at Fundstrat Global Advisors.

“This suggests that ‘fear’ is receding from the market,” he wrote in a research note.