Below I overlayed the VIX on the S&P 500 over ~2.5yrs. As you'll see, the VIX moves almost perfectly inverse (opposite) to the the S&P500. That's the normal relationship.
Something interesting is happening.
In the last month VIX has traded WITH S&P500, shedding it's usual inverse relationship. In the least, VIX has gained, while stocks have gained. See the light blue line on chart. It's tough to see on long timeframe chart, but very profound on shorter timeframes.
This is important. Often before major macro crashes, the VIX begins rising before the crash actually occurs, instead of while the crash occurs. This rise in VIX is usually caused by participants buying VIX as insurance/hedging against a suspected market downturn.
I've read and heard about this pattern. But in my short 10yrs watching markets (particularly VIX) I've never got to see it. This is a major warning sign.
