VIX’s Calm Relative to Bonds Makes Fundstrat Uneasy: Chart

Relative calm in U.S. stocks indicates they are poised to fall in the next month, according to Thomas J. Lee, managing partner at Fundstrat Global Advisors LLC. Lee cited the CBOE Volatility Index’s drop below the value of a similar indicator, tied to options on an exchange-traded fund for Treasury bonds, in a report Friday. Gaps as wide as the current one were followed 68 percent of the time by S&P 500 Index declines in the next 20 trading days, according to his data. The average loss was 1.3 percent.

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