1. VIX fell below -10 relative to HV20, signaling market optimism. 2. HV20 has recently decreased, aligning closely with VIX. 3. Implied volatility continues to fall, indicating reduced market fear. 4. Buy signals for SPY options based on positive market momentum. 5. Volatility derivatives are positively sloping, suggesting bullish sentiment.
The recent alignment of HV20 with VIX suggests diminishing market fear and potential upward momentum. Historically, such conditions often correlate with rising markets, evident in 2017's sustained S&P 500 gains.
VIX movements and its historical relationships with HV20 validate its importance in assessing market volatility, directly influencing investor sentiment and market strategies.
The immediate indicators signal potential upward movement, driven by current trading strategies. However, shifts in market sentiment can quickly alter this outlook, making it short-lived.