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Much has been made recently about the big drop in market volatility, but while the VIX is no doubt at low levels, it has failed to break to new lows for a couple of months now. Typically the VIX falls when the market rises and rises when the market falls. As shown below, however, the VIX has been moving sideways around the 16 level as the market has been rallying since December. During the last bull market, the VIX moved into the single digits, so it's not like 16 is some kind of floor.
What does this failure of the VIX to move lower mean for the market? We're unsure, but basic technical analysis of the VIX chart would suggest that it's headed higher, which historically has coincided with stocks heading lower.
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