Start of 5% Pullback? VIX Curve Signals Stocks May Recover Soon
- Inverted VIX curve has preceded S&P 500 gains in past year
- Strategists at Goldman and Stifel still call for 5% pullback
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Panic selling may be creeping up in the stock market, so much so that an options-based indicator is flashing a buy signal.
The Cboe Volatility Index, a gauge of S&P 500 Index options costs, has surged more than 30 percent over two days, pushing its spot price above that of its two-month futures for the first time since August. Such an inverted curve has occurred four times in the past year and all coincided with market bottoms.