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Will the VIX inversion halt US stocks sell off?

Will the VIX inversion halt US stocks sell off

On Monday, U.S. stocks in general and the S&P 500 specifically ended lower, amid rising fears from the spread of the coronavirus, resulting in inversion in the Cboe Volatility Index. But what does this inversion mean?

Mainly, the VIX inversion means that the stocks rout is coming to an end, which provides a good buying opportunity.

The VIX climbed to the highest level since October causing the spot price to surpass the March future prices. Actually, this indicates that the apparent risk in the immediate span rather than the longer term.


Overnight, the S&P 500 tumbled 51.84 points, or 1.6 percent, to end at 3,243.63, pushing the VIX up 25.21 percent to 18.23, the highest since October 10.

In 2003, after the breakout of the SARS virus, U.S. indices plunged in the month after but then rallied until the end of the year.

Today, shares in Japan, South Korea, Singapore and Australia suffered sharp losses as the deadly virus continued to damp risk appetite. 

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