Volatility Index Hits Highest Closing Level as Coronavirus Spreads


Problems mounts for the financial markets as the Volatility Index surged to the highest record level. Does it imply that stocks have more to fall as coronavirus spreads?

17 March 2020 | HYCM – The Volatility Index (VIX) had its highest recorded close yesterday as it surpassed the highs from the 2008/9 financial crisis. The situation that is overwhelming the market is that too many different sectors are going to be impacted by the coronavirus at the same time. The mantra, ‘too big to fail’ from 2008 has become ‘too many to fail’.

VIX close surpasses high closes from 2008/2009

Problems mount for financial markets
The VIX indicates that there is still yet more stock pain ahead. Even though the S&P500 fell nearly 12% yesterday lower prices look ahead. A multiyear trend line has now broken this week and price is moving towards the S&P500 lows as President Trump took office.
VIX

Coronavirus spread unrelenting

New Fiscal stimulus measures announced daily, central banks falling over themselves to cut interest rates, social distancing policies expanding on the hour and yet the markets tumble. The issue here is that this is a medical problem that needs a medical solution. As cases continually mount, along with the death toll, then fears will paralyze citizens as businesses can’t be ‘as normal’. The VIX is showing what the coronavirus case table is indicating: A growing problem.
COVID19

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