Halfway through August, it looks like this month will be one of the calmest months in the history of the S&P 500 index. However, under the laid-back appearance, the market's anxiety about the index's prospects seems to be showing no signs of abating.

The indicator that measures the implied volatility of VIX options has been rising for five of the past seven weeks, even though the VIX index itself has been declining. As a result, this indicator, known as the VVIX index, reached 7.5 times the VIX last Friday. The last time it reached this high was two months before the COVID-19 outbreak.

Judging from historical records, when the ratio is higher than the current level, the stock market will not perform very well. Chris Murphy, head of joint derivatives strategy at Haina International, said that since 2006, the ratio has increased 7 times. Among them, VIX often rises after 10 days, with an average increase of 16%.