Study: should stock market investors go long VIX?


This chart has gone around the financial world recently. It demonstrates that VIX tends to rise from late-July to mid-October, from a seasonality perspective.

Here’s a more indepth look at VIX’s seasonality

Click here to download the data in Excel.
As you can see, VIX does have a small tendency to go up from July – October. However this tendency has gone down over the past 10 years (VIX doesn’t go up from July-October as much as it used to). This is because some of the S&P 500’s weakest months are in July-October.

Based on the current data, the Medium-Long Term Model thinks that this bull market in stocks has approximately 1 year left. VIX tends to go up together with the S&P 500 during the final year of the S&P’s bull market.

Hence, going long VIX is a good way to buy yourself some protection for the final year of this bull market.
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