The CBOE Volatility Index or VIX has surged from the 13s at the start of the month to nearly 23 right now, which is the largest volatility spike since the stock market correction in February. Here's what the VIX looks like right now:While many traders and market participants were caught off-guard by the volatility spike, I specifically warned about it on October 2nd in a Forbes piece called "Why Another Market Volatility Surge Is Likely Ahead." Traders have become complacent as they passively ride the stock market higher and bet on lower volatility again. I showed three indicators that warned of an upcoming volatility surge: the 10-year/2-year Treasury spread (inverted and advanced three years, which leads the Volatility Index), the positioning of the commercial hedgers or "smart money" in the VIX futures, and also the extremely low volatility of volatility. As I said:Volatility spikes typically occur as the result of bearish stock market action instead of bullish action.
Source: Forbes October 11, 2018 19:30 UTC