Volatility Spike In Stocks

After non-stop talk about how low VIX  has been unexpectedly we get an enormous 1-day spike +46% to be exact. Summer months tend to get volatile so volatility might be here to stay.

Yesterday we printed 1,109 new 1-month lows when we get these 1-day spikes in new lows we typically get a couple of days of positive volatility in individual stocks as you can see in the chart below.

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The red line graphs 1-month new lows and the white line graphs the number of stocks that moved +4% or more on that particular day.  Spikes in 1-month lows typically leads to spikes in stocks up 4% or more over the next few days. Mean reversion at its best.

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Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463. 

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