Prepared for you by Randy Dunham
October 16, 2026
THE PRINT
The VIX has spent 81% of the past year below its long-term average.
THE CHART(S) / DATA
The CBOE VIX Index (also known as the “fear index”) measures market volatility based on S&P 500 options contracts. The VIX was created in 1990 and it’s become a useful tool for evaluating markets.
Here are a few key points worth knowing:
The long run average (1990 - present) of the VIX fluctuates between 19 and 20. The latest reading is 19.4265 to be exact.
The standard deviation around that mean is 8 points.
+1 SD is ~27 to 28.
+2 SD is ~35 to 36.
+3 SD is ~43 to 44.
A high VIX reading (close above 36) is a great long-term signal for buying stocks. It doesn’t have a perfect win-rate. Volatility spikes in bear markets (like 2008), but they work more often than not. Median 6-month gain on S&P 500 is 19% with an 84% win-rate.
A below-average VIX has historically been a favorable backdrop for stocks.
The latest VIX reading came in at 16.45:
Over the past year, the VIX has traded below 19 for 81% of the time. Its longest stretch above 19 came in Q1, when the Iran war began.
Historically, S&P 500 returns have been stronger when the VIX trades below its long-term average than when it trades between its average and +1 standard deviation:
Takeaway: The VIX has spent most of the past year below its long-term average. Historically, that has been a favorable backdrop for stocks.
Comment: Personally, when the VIX is below 20, I view market pullbacks as normal volatility.
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Material, data, and information in this newsletter are for informational purposes only. This is not tax, legal, or investment advice, and does not constitute a suggestion, solicitation, or offer to buy or sell securities. TTI believes this information is reliable but does not warrant its completeness or accuracy.