The Stock Market Flashes a Bullish Signal Seen Only 17 Times Since 1990. Big Gains Usually Follow in the Next Year.

The S&P 500 (SNPINDEX: ^GSPC) displayed unusually high volatility earlier this year when President Donald Trump began imposing tariffs. The index dropped more than 10% in two trading days in April, its fourth-worst two-day drop in history, then rebounded sharply when the president paused the most severe duties for 90 days.As the S&P 500 whipsawed, the CBOE Volatility Index (VOLATILITYINDICES: ^VIX) increased 143% in four trading days, the third-largest four-day spike in history, and topped 50 in April for the first time in five years. That was a bullish signal for the stock market because the S&P 500 has posted an average one-year return of 35% after incidents when the CBOE Volatility Index closed above 50.However, the U.S. stock market recently flashed another bullish signal. The CBOE Volatility Index fell more than 50% over a 20-week period for only the 17th time since 1990. Such a sharp reduction in volatility has usually lead to monster returns in the next year. Here's what investors should know.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool