"VIX Bubble" Statement by JPMorgan

World-famous investment bank JPMorgan stated that the VIX bubble could cause a rally in the stock market.

"VIX bubble" statement was made by JPMorgan. While the “fear index” in the market is rising, JPMorgan stated that this rise could be supportive for stocks if history repeats. In a joint note shared by JPMorgan Strategists Marko Kolanovic and Bram Kaplan, it was stated that the spread between the VIX, known as the fear index, and the 2-week S&P 500 volatility indices widened.   The note shared by statejists included the following statements: "Historically, after this move, volatility has fallen, while stocks are on the rise. On a historical basis, 3 months after the spread's expansion, the VIX dropped 11 points, while the markets rallied by 12 percent. We think it's a good opportunity to sell the ‘VIX bubble’ when the VIX is close to the record compared to real stock volatility." The VIX Index experienced a serious leap forward in 2020, when the coronavirus epidemic began and began to affect the global economy. While the stock markets broke a record with the effect of positive news about the coronavirus epidemic, VIX, which normally hovers around 19.5, continued its course over 20 during this period. The index followed a relatively high course compared to fluctuations in other asset classes such as interest rates.