The latest report from Fundstrat Global Advisors believes that the US stock market panic index is sending a signal to investors, indicating thatS&P 500 IndexProbably near the bottom.
The Cboe Volatility Index (VIX) is regarded by many as a market fear gauge, and its performance usually has an inverse relationship with the trend of U.S. stocks. When the stock market is rising, the VIX is mostly falling, and vice versa.
Fundstrat founder Tom Lee, who has long held a bullish view on U.S. stocks, pointed out that the VIX fell 5% on Thursday, while theS&P 500 IndexBut it fell 1%, sending a confusing signal to investors that, judging by historical data, U.S. stocks may eventually rise.
Lee said that since the inception of the VIX in 1990, it has only happened 10 times that the VIX has fallen 5%, whileS&P 500 Indexdown 1%. 6 months and 12 months after that,S&P 500 IndexThe average returns were 16.8% and 35.2%, respectively.
Lee believes that this phenomenon shows that although the stock market has downside risks now, it will not hurt to enter the market and buy stocks at this time, because the data shows that the stock market is approaching or reaching a low point at this time.
Lee highlighted that in 8 of the 10 instances, the stock price was at a low.
Lee has maintained his long position as stocks tumbled this year.After the Russian-Ukrainian war, he continued to reiterate that the end of the yearS&P 500 Index 5100 points, and stressed that the fundamentals of the bull market have not changed and that inflation is driven by commodity prices, not a structural issue.