The CBOE Volatility Index, also known as Wall Street’s “fear gauge,” ended below the 20 level on Friday to mark the lowest daily close since the March 2020 dip.
Falling below the 20 level could pave the way for more rises in the stock marketsFundstrat’s Tom Lee said in a note Friday, Bloomberg reports.
Systematic and quantitative investment funds they would probably take note of the risk appetite signaled by the VIX’s drop below 20 points and increase their exposure to stocksLee explained.
The VIX rose to more than 35 points in the last week of January when a group of Reddit traders bought stocks like GameStop, causing a short-squeeze and inflicting huge losses on hedge funds.
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