Volatility is coming down
VIX is coming down as stocks rally.
VIX has fallen 9 out of the past 13 days, while still relatively elevated. When this happened in the past, the S&P's short term returns were mixed, but mostly positive over the next 6-12 months.
Since VIX rarely stays elevated for too long, it typically fell over the next 2+ months:
While VIX continues to fall, the S&P 500's 30 day trailing volatility has risen to its highest level ever:
Such high trailing volatility led to a S&P rally in the past. While 1932, 1987, and 2008 didn't necessarily mark short term bottoms, they were a decent place to buy from a long term perspective. And although November 1929 still came a long ways from marking the bottom of the bear market, the S&P still made a major medium term rally:
With that being said, the gap between trailing volatility and VIX is at its highest level ever. Similar large gaps came close to marking bullish opportunities:
It's not just stocks that have been extremely volatile. Volatility in FX, gold, oil, and bonds spiked along with equity vol in March, and are now subsiding. The following chart illustrates the average distance of various volatility indices from their 6 month average: