Chart of the Day - Thursday, August 15, 2024

🏆 Today’s Chart of the Day was shared by Charlie Bilello (@CharlieBilello).

• The Volatility Index ($VIX) closed at 15.22 today after spiking to its third-highest level in history last week. It closed at 38.57 last Monday, which was already significantly off its intraday high of 65.78. It’s down -60.5% from Monday’s close, falling in seven of the past eight sessions.

• Charlie points out that this has been the biggest eight-day volatility crash on record. The S&P 500 is up +6.9% over the same period, marking its best eight-day rally since launching off the bear market low in November 2022.

• Looking at the other 19 significant $VIX crashes in history, Charlie points out that the S&P 500 has typically had above-average returns across all time frames measured (1mo, 3mo, 6mo, 1yr, 2yr, 3yr, 4yr, 5yr).

Takeaway: The Volatility Index ($VIX) has fallen –60.5% over the past eight days, marking the largest volatility crash on record. When the $ VIX crashes at this rate, the S&P 500 has historically performed better than usual.