The RSI of the VIX is at 33.8. A level not seen for more than six years
During Monday’s session, we saw the VIX plummet more than 15% to below the $20 barrier.
Once it seems that the war in Ukraine is calming down and we see that Putin’s troops can no longer advance, it seems that we are back to a world with less volatility, but is this so?
The truth is that there is still Covid, and although it is true that we are at July 2020 levels, more than 3,500 people die every day in the world.
In addition, the shortages continue. The most dangerous thing is that the shortages are produced by two principles. It is no longer only that raw materials are (many) at record highs. Now we have a double component: the price of fuels is at record highs, and both the producer and the transporter cannot afford to take food to the supermarkets.
In addition, inflation is still at levels that have not been seen in the last 40 years.
What can we expect from this drop in the VIX?
The VIX is one of the assets with the greatest mean reversion. Not only in the price itself but also its technical data. One of the best indicators of market sentiment is the RSI.
The relative strength index (RSI) is a momentum indicator used in technical analysis that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in a stock or other asset price.
Currently, the RSI of the VIX is at 33.8. A level not seen for more than six years.