Original title: us stocks fluctuate unfinished panic index may still have peak analysts remind investors to pay attention to "these two days" in August

Source: FX168

DataTrek Research, an investment research firm, has successfully predicted through history that US stocks may continue to rise in the second and third weeks of July, but volatility may surge in the third week, and US stocks were hit hard on Monday, with the panic index VIX soaring nearly 22%. Although the three major stock indexes rose on Tuesday (July 20) and recovered most of their previous losses, history shows that the volatility of US stocks may not be over.

DataTrek points out that history shows that VIX averages higher on the 26th trading day of the third quarter, which falls on Aug. 6 this year. In addition, VIX usually has a second peak at the end of August and the 43rd trading day of the third quarter, which falls on Aug. 25 this year.

July and August are the peak summer travel periods, during which the US stock market is less liquid. As the old saying goes, "the price you see on the screen today is the market's best guess about the economy and corporate profitability over the next six months." so today's market is focused on, where will we be at the end of 2021? What will the peak spending season be like during the Christmas holiday? How will a pandemic develop in winter in the northern hemisphere? How will these two factors affect each other?

History shows that this week is the beginning of a period of stock market turmoil and should last until August, and investors should be careful in the coming weeks, as real liquidity will remain unusually low.

A very important indicator is that the s & p 500 is down 5% a day. Since 1957, the average daily increase of the index has been very small, only about 0.03%, and there is a standard deviation of 1% around the average.

Over the past 10 years (about 2400 trading days), the S & P has fallen more than 5 per cent in five different time points: August 8, 2011 (- 6.7%, consistent with the above VIX's analysis of August volatility), March 9, 2020 (- 7.6 pct), March 12, 2020 (- 9.5 pct), March 16, 2020 (- 12.0 pct) and March 18, 2020 (- 5.2 pct) With the exception of the summer of 2011, all the slumps occurred when the novel coronavirus pandemic broke out around the world last year.

DataTrek advises investors to enter the market the day after every 5 per cent drop in the S & P, rather than the first day, because volatility that creates a good entry point (which can be held for more than a year after buying) usually does not end in a single day, but can fluctuate for several days in a row.