The market’s expectations for the relative strength of impending price swings of the S&P 500 Index are reflected in the Cboe Volatility Index (VIX), a real-time index (SPX). It produces a 30-day forward estimate of volatility because it is generated from the pricing of SPX index options with short-term expiration dates. 1 Volatility, or how quickly prices fluctuate, is frequently used to assess market emotion, particularly the level of anxiety among traders.
VIX levels are perfect to help know market volatility and when not to play with market or open any BUY positions. When VIX levels are high it is always best practice to stay calm and not to get carried away in noises.
There are only 4 times when VIX was higher then current market Volatility year 2022.
2002 -> after Dot-Com bubble burst which started a bear market rally in year 2000-01 , following years were volatile year for S&P500 .
2008/09 -> needs no introduction , Financial crisis , housing bubble market dropped as much as 54% during this period and volatility was at peak.
2020 -> Covid-19 . i will stop right there.
Do check out our Chart section. we have created some good charts to help you out to make good investment decision.