Chart of the Day - Wednesday, July 05, 2023

Today's Chart of the Day was shared in a note by Andrew Thrasher (@AndrewThrasher). The $VIX continues to sit near multi-year lows. However, Andrew points out that "the door is open for a spike in volatility." The chart shows the $VIX over the past 15 years, with an indicator measuring the standard deviation for a composite of four volatility indices (Dow, S&P 500, Russell, and Nasdaq). The orange lines mark all of the readings below 0.60. Andrew first introduced this concept in his award-winning research paper, “Forecasting a Volatility Tsunami,” in which he explained, "Not all contractions are followed by volatility spikes, but nearly all spikes are preceded by these types of contractions." Click here to read the full note.