Chart of the Day - Tuesday, February 11th, 2020

Today's Chart of the Day was shared on Twitter by Andrew Thrasher (@AndrewThrasher). On top is the Volatility Index ($VIX), and on the bottom is the Volatility of the Volatility Index ($VVIX). As we pointed out in yesterday's Chart of the Day, there are a number of bearish divergences forming right now. This is another important one to add to the list. As you can see, $VVIX failed to make a new low along with $VIX. As Andrew notes, this divergence between the $VIX and $VVIX is bullish for volatility in the short-term, which means stocks could be in for some turbulence in the days/weeks ahead. Volatility can be a complex topic, but Andrew understands it better than just about anyone out there. In fact, he won the 2017 Charles H. Dow Award for a paper titled "Forecasting a Volatility Tsunami." Therefore, when he comments on volatility like this, it's prudent to pay attention.