Our VIX signal triggered on March 25th. This model tends to get one or two signal prints right before a VIX pop and then continues to trigger until things calm down. It is the first signal or two that are important. The lag until potential equity market fireworks varies from 1-6 weeks on average, so we look at price momentum for timing.
Here is a longer-term chart of signals also overlaid on VIX.
We like to combine the signal with a loss of momentum in the indices. While the S&P is still holding in…
…the DJIA is right on the edge
… and the Russell has already rolled.
With the signal suggesting volatility may just pick up again in short order, we think it is time to be more cautious.