Bullish Divergence Between S&P500 and VIX
Bullish Divergence Between S&P500 and VIX
The US VIX has not made a new high compared to the CBOE Volatility index throughout this fall. The fall so far is five waves and the argument is on how to mark it A-B-i-ii-i-ii or i-ii-i-ii-i-ii or (i-ii-iii-iv-v)=1= leading diagonal. The last one fits with what the VIX is showing, the falling intensity of fear into the fall because everyone who has to sell for now has sold already.
Has this happened before? Yes in 2007-2008 wave 1 down developed over 6 months and the VIX did not confirm the new low in the S&P in the 5th wave. Ok, some difference but the divergence resulted in a 50% retracement of wave 1, in wave 2. Something similar could happen above is how I am trying to think.
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