The oversold VIX and how the SPX grinds higher

When the RSI on the VIX Index trades at a reading of 38 or below (note it has never registered a weekly oversold reading of below 30), the S&P 500 embarks on a rally against an economic backdrop of trying or testing conditions or headwinds.

This climb up a ‘wall of worry’ tends to exhaust itself when the RSI registers a  reading of 64 while the upward equity trend can last between 6 and 24 months.

We are 19 months into this current ‘grind’ higher.

It’s not the safest equity market.

July 4, 2024

by Rob Zdravevski

rob@karriasset.com.au