Score 8.3 (out of 10): VIX (US Equity Volatility) sets up for +20% rally in 1 month

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What’s Going On Here?

A combination of rising volatility levels, market sentiment and pending events such as US inflation and Jackson Hole has seen a pickup in volatility and selloff across stock market indices.

Why Now?

VIX (US Equity Volatility) has triggered a new technical analysis ‘rally reversal’ signal. During similar occasions, VIX (US Equity Volatility) had a median return of +20%, over the following 1 month – based on 10 historical occasions with 9 of those showing positive returns (90%). This buy signal for VIX (US Equity Volatility) received a high score of 8.3 (out of 10). This insight was generated on 2022-August-24 with last price of 22.82.

What’s This Company About?

VIX (US Equity Volatility) is in the Equity market index business. Based on the last 2 years’ risk/return profile, this asset is seen as Moderate Risk. Ticker symbol: ^VIX.

What’s My Risk / Reward and Time Horizon?

We found 1 month to be the optimal trade horizon, after testing a number of possible alternatives (accuracy of previous returns). Otherwise consider closing out this trade once the target level of 27.39 (+20%) has been reached. Based on VIX (US Equity Volatility)’s recent up and down swings, LongShortBets suggests considering to set a stop loss level for this insight at 20.52 (last price at 22.82), which is equivalent to a -10.1% decline.

Returns during similar periods:

The chart above shows the previous returns (in %) based on similar setups with the most recent ‘insight’ shown under (1), the second most recent ‘insight’ under (2), etc.

Previous episodes:

55.9% (April-2022), 14.3% (December-2021), 76% (October-2021), 37.6% (August-2021), 10.5% (June-2021), 8.7% (April- 2021), -7.9% (February-2021), 6.9% (November-2020), 29.4% (July-2020), 25.7% (April-2020).

Historical Chart:

Summary:

NameVIX (US Equity Volatility)
ViewUp
Star (1 to 10)8.3
Target20%
Time1 month
Hit Rate90%

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