Two Charts Similar to 2017 - SPX and VIX Indicators

The S&P 500 has been 379 days without more than a 2.01% correction.

The Average Daily Range of the VIX is at 2017 levels.

We review a brief history of the market since 2017. We know that in 2017, after the lowest historical VIX reading, the market became more volatile in February 2018. It is interesting how quickly volatility spiked even higher in 2020 with the pandemic and how recently, we have seen about 1.5 years (379 trading days) with a market that has aggressively compressed volatility back to 2017 levels. This analysis is based on the average daily range of the VIX and the inability of the S&P 500 to have more than a 2.01% pullback on any given day.

Historically volatility moves in cycles. It is difficult to "time" the cycles. Recently, the market has been stretched to historical extremes in one direction. Low volatility will persist longer than higher volatility in modern times since the Federal Reserve has become more active in their policy decisions.