One of the hallmarks of this year’s bear market has been heightened volatility, but that appears to be easing during the rally that started in mid-June. The CBOE Volatility Index, or VIX, is a calculation designed to produce a measure of the constant 30-day expected volatility of the U.S. stock market. The VIX, also called the fear gauge, is hovering around 21, far below the 35 reading earlier in the year, and well below the 85 reading during the height of the pandemic. In fact, the VIX is trading well below its 200-day simple moving average. Volatility has been retreating due to a rebound in the market, with the S&P 500 up 12.5% since its June 16th low. However, a reading over 20 still reflects a heightened sense of fear over the short-term with many market observers believing the summer bear market rally may be short-lived.

Finsum: While market volatility appears to be easing based on recent VIX readings, this may be short-lived with the summer bear market on its last legs.