Bridgewater is making a huge put buy in the S&P 500 for early 2020, Id like to take a moment and dive into what exactly is going on from a volatility perspective. Consider this chart comparing the S&P 500 total return (which includes dividends) vs VIX. Over the last 4 months or so the stock market has gone on to make new highs and the VIX is actually up during that time. Typically, the VIX will move lower when the S&P 500 moves higher as fear subsides when the market rallies. Historically, when I have seen this phenomenon occur where both VIX and SPX increase in value at the same time, it has been a warning sign for stocks. I’m not predicting a global financial meltdown, but this did happen leading up to the last recession. Take a look at the first April to aug in 2007, which is what led up to the top on Aug 15 2007. The reason being is that the stock market’s torrid pace higher with each pull back only lasting a few days max has made i
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